StoneX (SNEX)

Financial services network StoneX Group (NASDAQ:SNEX) posted $34.44 billion of revenue in Q2 CY2025, up 28.7% year on year. Its GAAP profit of $1.22 per share was 12.2% below analysts’ consensus estimates.

Company Overview

Originally known as INTL FCStone until its 2020 rebranding, StoneX Group (NASDAQ:SNEX) provides a global financial services network connecting companies, traders, and investors to markets through clearing, execution, and advisory services.

Diversified capital markets firms provide multiple services across trading, advisory, and investment functions. These businesses benefit from cross-selling opportunities, market volatility that drives trading activity, and increasing demand for complex financial solutions. Headwinds include regulatory capital requirements, cyclical revenue streams tied to market conditions, and the need for continuous technology investment to maintain competitive electronic trading capabilities.

StoneX Group competes with global financial institutions like JPMorgan Chase (NYSE:JPM) and Goldman Sachs (NYSE:GS) in institutional services, Interactive Brokers (NASDAQ:IBKR) and Charles Schwab (NYSE:SCHW) in self-directed trading, and specialized firms like Marex Group and ED&F Man in commodity markets.

A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, StoneX grew its revenue at an excellent 20% compounded annual growth rate. Its growth beat the average financials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. StoneX’s annualized revenue growth of 47% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, StoneX generated an excellent 28.7% year-on-year revenue growth rate, and its revenue reached $34.44 billion.

Revenue growth is one major determinant of business quality, and the efficiency of operations is another. For Diversified Capital Markets companies, we look at pre-tax profit rather than the operating margin that defines sectors such as consumer, tech, and industrials.

Financials companies manage interest-bearing assets and liabilities, making the interest income and expenses included in pre-tax profit essential to their profit calculation. Taxes, being external factors beyond management control, are appropriately excluded from this alternative margin measure.

Over the last four years, StoneX’s pre-tax profit margin couldn’t build momentum, hanging around 0.3%. It was also flat on a two-year basis, showing the company has consistently failed to improve its efficiency.

StoneX’s pre-tax profit margin came in at 0.2% this quarter. This result was 0.1 percentage points worse than the same quarter last year.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

StoneX’s full-year EPS grew at a weak 3.2% compounded annual growth rate over the last four years, worse than the broader financials sector.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

StoneX’s EPS grew at an unimpressive 8.1% compounded annual growth rate over the last two years, lower than its 47% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

We can take a deeper look into StoneX’s earnings to better understand the drivers of its performance. A two-year view shows StoneX has diluted its shareholders, growing its share count by 7.5%. This has led to lower per share earnings. Taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q2, StoneX reported EPS of $1.22, down from $1.25 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects StoneX’s full-year EPS of $5.87 to grow 8.3%.

Financial firms generate earnings through diverse intermediation activities, making them fundamentally balance sheet-driven enterprises. Investors focus on balance sheet quality and consistent book value compounding when evaluating these multifaceted financial institutions.

When analyzing this sector, tangible book value per share (TBVPS) takes precedence over many other metrics. This measure isolates genuine per-share value and provides insight into the institution’s capital position across diverse operations. Traditional metrics like EPS are helpful but face distortion from the complexity of diversified operations, M&A activity, and various accounting rules that can obscure true performance across multiple business lines.

StoneX’s TBVPS grew at an incredible 22.3% annual clip over the last five years. TBVPS growth has recently decelerated a bit to 20.2% annual growth over the last two years (from $26.66 to $38.55 per share).

Return on equity, or ROE, tells us how much profit a company generates for each dollar of shareholder equity, a key funding source for banks. Over a long period, banks with high ROE tend to compound shareholder wealth faster through retained earnings, buybacks, and dividends.

Over the last five years, StoneX has averaged an ROE of 18.7%, impressive for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This is a bright spot for StoneX.

The debt-to-equity ratio is a widely used measure to assess a company's balance sheet health. A higher ratio means that a business aggressively financed its growth with debt. This can result in higher earnings (if the borrowed funds are invested profitably) but also increases risk.

If debt levels are too high, there could be difficulties in meeting obligations, especially during economic downturns or periods of rising interest rates if the debt has variable-rate payments.

StoneX currently has $16.51 billion of debt and $1.98 billion of shareholder's equity on its balance sheet, and over the past four quarters, has averaged a debt-to-equity ratio of 7.2×. We think this is dangerous - for a financials business, anything above 3.5× raises red flags.

We struggled to find many positives in these results. Overall, this was a softer quarter. The stock remained flat at $91.96 immediately following the results.

Updated: October 30, 2025 at 12:42 AM EDT

Before investing in or passing on StoneX, we urge you to understand the company’s business quality (or lack thereof), valuation, and the latest quarterly results - in that order.

StoneX is a pretty decent company if you ignore its balance sheet. First off, its revenue growth was impressive over the last five years. And while its weak EPS growth over the last four years shows it’s failed to produce meaningful profits for shareholders, its TBVPS growth was exceptional over the last five years. On top of that, its market-beating ROE suggests it has been a well-managed company historically.

StoneX’s P/E ratio based on the next 12 months is 2.3x. Certain aspects of its fundamentals are attractive, but we aren’t investing at the moment because its balance sheet makes us uneasy. Interested in this company and its prospects? We recommend you wait until its debt load falls or its profits increase.

Wall Street analysts have a consensus one-year price target of $116 on the company (compared to the current share price of $94.94).