Company Analysis - StoneCo Ltd (NASDAQ: STNE) was initiated with a "Buy" rating in August 2023, with a forward P/E ratio of 26x, indicating a solid foundation for future stock growth [1] Industry Insights - Beyond the Wall Investing provides access to high-quality analysis of Wall Street buying and selling ideas, offering a free trial and a 10% discount for new subscribers [1] - The platform is managed by Daniel Sereda, a chief investment analyst with expertise in filtering critical investment ideas from vast data, catering to institutional market participants [1]

Company Overview - StoneCo (NASDAQ: STNE) is facing challenges due to Brazil's macroeconomic environment, but the company has implemented multiple initiatives to maintain operational excellence [1] - The company has an improved financial profile and is starting to return value to shareholders [1] Analyst Perspective - The analysis is based on fundamental bottom-up analysis and quantitative modeling, with a focus on identifying perception gaps to capitalize on over-pessimism and excessive exuberance [1] - The objective is to identify asymmetric opportunities for investment [1]

Company Performance - StoneCo (NASDAQ: STNE) delivered strong Q3 numbers in November last year [2] - Despite strong Q3 performance, the stock plummeted 30% since the earnings release [2] - The stock has accumulated more than 50% devaluation over the last twelve months [2] Analyst Background - The author is a researcher and operations manager at DM Martins Research [4] - The author has previously contributed to TheStreet and currently writes for platforms such as TipRanks and GuruFocus [4] - The author's goal at Seeking Alpha is to provide insightful analysis primarily on foreign equities, with a focus on emerging markets [4]

Stock Performance - StoneCo (STNE) shares declined 26.1% over the trailing three months, underperforming the Zacks Computer & Technology sector's return of 6.7% and the Zacks Internet - Software industry's appreciation of 6.5% [1] - STNE shares lagged peers like Fortinet (FTNT), Paylocity Holding (PCTY), and Smartsheet (SMAR), which appreciated 23.1%, 16.9%, and 1.1%, respectively, over the same period [1] Financial Performance - The Zacks Consensus Estimate for STNE's Q4 2024 revenues is $585.02 billion, indicating a year-over-year decline of 10.80% [4] - The consensus mark for Q4 2024 earnings is 33 cents per share, down 3 cents in the past 30 days, indicating a year-over-year decline of 8.33% [4] - The Zacks Consensus Estimate for STNE's 2024 revenues is $2.29 billion, suggesting a year-over-year decline of 5.27% [4] - The consensus mark for 2024 earnings is $1.17 per share, down 5 cents over the past 30 days, but indicating year-over-year growth of 20.62% [5] - StoneCo has a mixed earnings surprise history, missing the Zacks Consensus Estimate in one of the trailing four quarters and beating the other three, resulting in an average surprise of 3.42% [5] Operational Challenges - StoneCo's underperformance is attributed to a decline in Total Payment Volume (TPV) within the key accounts segment, led by a loss of volume from a major sub-acquirer in Q3 2024 [2] - The Non-Performing Loans (NPL) rate for Merchant Solutions increased to 3.7% from 2.6% last quarter, indicating a higher risk of loss unless outstanding debts are recovered [3] - The key accounts segment experienced an 11.3% sequential decline in TPV [3] - Financial expenses are expected to rise in Q4 due to higher interest rates [10] Growth Prospects - StoneCo saw strong growth in TPV for its Micro, Small, and Medium Business (MSMB) clients, with a 20% year-over-year increase to BRL 114 billion in Q3 2024 [6] - MSMB TPV is projected to keep growing, driven by steady gains in Card TPV and a significant rise in PIX QR code volumes [6] - The MSMB segment reached a record take rate of 2.58% in Q3 2024, reflecting effective revenue generation driven by strong payment take rates and increased monetization in banking and credit services [7] - StoneCo reported 4 million active payment clients in the MSMB segment in Q3 2024, marking 21% year-over-year growth [8] - The company achieved remarkable growth in its banking services, with its client base expanding 47% year over year to reach 2.8 million customers [8] - Total deposits improved significantly to BRL 6.8 billion, while demand deposits rose 50% to BRL 6.7 billion [9] - StoneCo surpassed its annual guidance for credit, achieving a portfolio of BRL 923 million in Q3 2024, representing quarter-over-quarter growth of nearly 30% [9] Zacks Rank - STNE currently carries a Zacks Rank 4 (Sell) [11]

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?Let's take a look at what these Wall Street heavyweights have to say about StoneCo Ltd. (STNE) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.StoneCo currently has an average brokerage recommendation ( ...

StoneCo (STNE) shares have plunged 55.2% over the past year against the Zacks Internet - Software industry’s growth of 31.3% and the broader Zacks Computer & Technology sector’s return of 30.6%.The company has underperformed its industry peers, including Five9 (FIVE) , Innovid (CTV) and Smartsheet (SMAR) , over the same time frame.While Five9 has lost 46% over the past year, CTV and Smartsheet have rallied 114.1% and 17.4%, respectively.The underperformance can be attributed to increased competition from ba ...

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about StoneCo Ltd. (STNE) .StoneCo currently has an average brokerage recommendation (ABR) of 1.80, o ...

Investors interested in Internet - Software stocks are likely familiar with StoneCo Ltd. (STNE) and Paycor HCM, Inc. (PYCR) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate ...

StoneCo. Announces New Share Repurchase Program of up to R$ 2 billionNovember 21, 2024 6:10 PM EST | Source: StoneCo Ltd.George Town, Grand Cayman--(Newsfile Corp. - November 21, 2024) - StoneCo Ltd. (NASDAQ: STNE) (B3: STOC31) ("Stone" or "the Company") announced that its Board of Directors, pursuant to written resolutions dated November 21st, 2024, has authorized a share repurchase program, under which Stone may repurchase up to R$ 2 billion in outstanding Class A common shares. The program ...

Now you can get access to the latest and highest-quality analysis of recent Wall Street buying and selling ideas with just one subscription to Beyond the Wall Investing ! There is a free trial and a special discount of 10% for you. Join us today!I initiated coverage of StoneCo Ltd. (NASDAQ: STNE ) on August 12, 2023 , when the stock was trading at $13.52 and since then, STNE has moved in a wide trading range, occasionally trying to move higherDaniel Sereda is chief investment analyst at a family office whos ...