In addition to the machine: Stone’s strategy to double profits in four years.
The Stone Company continues to make waves in the market with its impressive performance and ambitious goals. Recently, the company announced its strategy to double profits within the next four years, leaving investors optimistic about its future prospects. The company’s management believes that this target is not only achievable but also sets the stage for even greater success down the line.
One of the key components of Stone’s strategy is its integration with Linx, a move aimed at attracting new customers through its software business. By combining the strengths of both companies, Stone hopes to tap into new markets and expand its reach even further. The integration with Linx has been long-awaited by the market, as it represents a clear sign of the company’s commitment to combining businesses and maximizing value.
CEO Pedro Zinner emphasizes that while growth has always been a priority for the company, there is now an opportunity to focus on improving profitability by leveraging efficiency. In an interview with EXAME Invest, Zinner explains that the goal is not to change the strategy but rather to clarify its implementation and concentrate on the most lucrative opportunities. This shift in focus is driven by the belief that there are untapped potential and numerous avenues for growth in the financial services and software sectors.
The micro, small, and medium-sized enterprises (MSMEs) segment is a particularly important focus for Stone. This group has always been a priority for the company, but its significance has been further emphasized in the current strategy. Stone aims to outpace the industry average and handle payments worth more than a staggering amount by 2027, with a take rate of 2.7 percent. The ambitious target reflects the company’s confidence in its ability to capture a larger share of this market and provide valuable financial services to MSMEs across various industries.
To achieve its growth targets, Stone plans to rely on the synergy between its various businesses. The integration with Linx’s software business plays a crucial role in this strategy. By leveraging the software company’s customer base, Stone aims to offer financial products and establish itself as a comprehensive solution for MSMEs. The company will focus on key verticals such as grocery stores, restaurants, pharmacies, and petrol stations, aiming to become a trusted “one-stop-shop” for businesses in these sectors.
Stone’s Chief Strategist, Lia Matos, highlights the importance of combining financial services and software as a differentiating factor in the market. According to Matos, the software aspect adds value and sets Stone apart from its competitors. The integration with Linx’s software business strengthens this advantage and positions Stone as a leading player in the industry.
Notably, financial services have emerged as the company’s main revenue driver. Stone’s financial services platform, which initially focused on payments, has now expanded to include banking and credit solutions. This expansion phase presents a significant opportunity for Stone to monetize its customer base further. By offering a range of financial services beyond payments, Stone aims to deepen its relationship with customers and provide them with comprehensive solutions tailored to their specific needs.
In line with this strategy, Stone plans to resume lending operations and strengthen its banking vertical. Despite facing challenges due to the wave of insolvency in 2021, the company sees room for cautious growth in this area. With ample credit available, Stone’s CFO, Mateus Scherer, expresses confidence in the company’s ability to reach its lending goals. The aim is to secure a substantial amount in credit next year and exceed a staggering figure by the end of 2027.
Furthermore, Stone intends to expand its other financial services, including deposits. The company currently holds significant deposits and aims to grow substantially in this area, reaching an impressive amount next year and doubling it by 2027. This focus on expanding its range of financial services reflects Stone’s commitment to becoming a comprehensive financial partner for businesses across various sectors.
In conclusion, Stone’s strategy to double profits in four years is a testament to its unwavering dedication to growth and innovation. The integration with Linx’s software business, along with a concentrated focus on MSMEs and the expansion of financial services, positions Stone as a formidable player in the market. With a clear vision and ambitious goals, Stone is well on its way to achieving its targets and driving sustainable profitability in the years to come. Investors can look forward to an exciting journey with the Stone Company as it continues to shape the future of the financial services industry.
