Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>StoneCo had a successful year with substantial strategic advancements, impressive financial performance, as well as strategic milestones that bolstered the company’s market position while paving the way for future growth.</li><li>The year saw the implementation of strategic adjustments that aimed to better position the business for the future.</li><li>As such, the company reorganized itself to effectively deliver solutions across different client segments, from micro to medium businesses.</li></ul>

StoneCo had a successful year with substantial strategic advancements, impressive financial performance, as well as strategic milestones that bolstered the company’s market position while paving the way for future growth.The year saw the implementation of strategic adjustments that aimed to better position the business for the future.As such, the company reorganized itself to effectively deliver solutions across different client segments, from micro to medium businesses.

StoneCo Ltd.: Is The Banking Sector Growth Likely To Last For Them? - Major Drivers

<ul><li>This is our first report on fintech solutions provider, StoneCo.</li><li>The company delivered strong financial results in Q3 2023 with a 25% increase in total revenue YoY, achieving BRL 3.1 billion which surpassed its guidance by 2%.</li><li>The impressive growth in the top line was followed by a 3.3x increase in adjusted EBT, hitting BRL 545 million.</li></ul>

This is our first report on fintech solutions provider, StoneCo.The company delivered strong financial results in Q3 2023 with a 25% increase in total revenue YoY, achieving BRL 3.1 billion which surpassed its guidance by 2%.The impressive growth in the top line was followed by a 3.3x increase in adjusted EBT, hitting BRL 545 million.

StoneCo Ltd: Initiation of Coverage - What Is Its Biggest Competitive Advantage? - Major Drivers

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

<ul>
<li>In 2H23 our longs Visa and PagSeguro delivered positive returns, whilst PayPal was in negative territory; among our shorts, Kakao Pay was modestly successful, DLocal and Affirm continued to appreciate</li>
<li>We retain card network megacap Visa as a core holding, and keep PagSeguro and PayPal adding Cielo to the buy list</li>
<li>We keep our negative views on DLocal and Affirm, and remove Kakao Pay from the sell list for its less marked price-to-sales multiple valuation</li>
</ul>


In 2H23 our longs Visa and PagSeguro delivered positive returns, whilst PayPal was in negative territory; among our shorts, Kakao Pay was modestly successful, DLocal and Affirm continued to appreciate
We retain card network megacap Visa as a core holding, and keep PagSeguro and PayPal adding Cielo to the buy list
We keep our negative views on DLocal and Affirm, and remove Kakao Pay from the sell list for its less marked price-to-sales multiple valuation


Payment Companies – Our High Conviction Calls for 1H 2024

Thematic (Sector/Industry)

<ul>
<li>In 1H23 and in the early part of 3Q23, our longs – Visa, Wise and PagSeguro – delivered positive returns; our shorts, DLocal and Kakao Pay, were also modestly successful</li>
<li>Ahead of results to June 2023, we retain card network megacap Visa as a core holding, as well as PagSeguro; we add PayPal and drop Wise from the buy list</li>
<li>We keep our negative view on DLocal and add Affirm, given high take-rates and  premium valuations; we stick with our negative on Kakao Pay due to its lofty multiples</li>
</ul>


In 1H23 and in the early part of 3Q23, our longs – Visa, Wise and PagSeguro – delivered positive returns; our shorts, DLocal and Kakao Pay, were also modestly successful
Ahead of results to June 2023, we retain card network megacap Visa as a core holding, as well as PagSeguro; we add PayPal and drop Wise from the buy list
We keep our negative view on DLocal and add Affirm, given high take-rates and  premium valuations; we stick with our negative on Kakao Pay due to its lofty multiples


Payment Companies – 1H 2023 in Review, Our High Conviction Calls for 2H 2023

Event-Driven

<ul>
<li>StoneCo has disposed of its remaining 4.2% stake in Inter &amp;Co, slamming the door shut on plans for a leading Brazilian neobank-paytech partnership originally announced in May 2021</li>
<li>Stone acquired 5% of Inter for BRL2.5bn in June 2021; the extent of the fintech market malaise means that currently BRL2.5bn (c USD500m) would buy close to 50% of Inter</li>
<li>This StoneCo stake disposal at least removes the Inter shares’ overhang risk; yet despite this technical relief, we reiterate that Inter’s fundamental outlook remains a challenging one</li>
</ul>


StoneCo has disposed of its remaining 4.2% stake in Inter &amp;Co, slamming the door shut on plans for a leading Brazilian neobank-paytech partnership originally announced in May 2021
Stone acquired 5% of Inter for BRL2.5bn in June 2021; the extent of the fintech market malaise means that currently BRL2.5bn (c USD500m) would buy close to 50% of Inter
This StoneCo stake disposal at least removes the Inter shares’ overhang risk; yet despite this technical relief, we reiterate that Inter’s fundamental outlook remains a challenging one


Inter & Co (INTR US) – No More StoneCo Stake Overhang, but the Fundamental Outlook Remains Tough

Brazil

StoneCo Ltd. provides financial technology solutions. The Company offers end-to-end cloud-based technology platform to conduct electronic commerce across in-store, online, and mobile channels. StoneCo serves customers in Brazil.

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StoneCo (STNE US)

StoneCo Ltd.: Is The Banking Sector Growth Likely To Last For Them? - Major Drivers

StoneCo had a successful year with substantial strategic advancements, impressive financial performance, as well as strategic milestones that...

Baptista Research

StoneCo Ltd: Initiation of Coverage - What Is Its Biggest Competitive Advantage? - Major Drivers

This is our first report on fintech solutions provider, StoneCo. The company delivered strong financial results in Q3 2023 with a 25% increase in...

Baptista Research

Payment Companies – Our High Conviction Calls for 1H 2024

In payments, we stick with Visa, PayPal and PagSeguro, adding Cielo to the buy list; we remain negative on DLocal and Affirm, removing Kakao Pay...

Victor Galliano

Payment Companies – 1H 2023 in Review, Our High Conviction Calls for 2H 2023

Our 2H 2023 payments company longs are card network megacap Visa, value play PagSeguro and PayPal with our short calls being DLocal, Kakao Pay and...

Victor Galliano

Inter & Co (INTR US) – No More StoneCo Stake Overhang, but the Fundamental Outlook Remains Tough

StoneCo's disposal of its Inter stake lifts overhang but key fundamental hurdles remain for Inter; forecast high loan growth will absorb capital,...

Victor Galliano

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