Core Viewpoint - StoneCo Ltd. is experiencing a notable performance in the market, with upcoming earnings expected to show significant growth in both earnings per share and revenue compared to the previous year [2][3]. Group 1: Stock Performance - StoneCo Ltd. closed at $18.57, reflecting a -1.07% change from the previous day, underperforming the S&P 500, which had a loss of 0.5% [1]. - Prior to the latest trading session, StoneCo's shares had increased by 17.9%, outperforming the Computer and Technology sector's gain of 8.21% and the S&P 500's gain of 2.74% [1]. Group 2: Earnings Projections - The projected earnings per share (EPS) for StoneCo Ltd. is $0.41, indicating a 17.14% increase from the same quarter last year [2]. - The consensus estimate for revenue is $663.59 million, reflecting a 9.6% rise from the equivalent quarter last year [2]. Group 3: Annual Estimates - For the annual period, the Zacks Consensus Estimates predict earnings of $1.62 per share and revenue of $2.7 billion, representing increases of +20% and +9.78% respectively from the previous year [3]. - Recent modifications to analyst estimates suggest positive sentiment regarding StoneCo's business and profitability [3]. Group 4: Valuation Metrics - StoneCo Ltd. has a Forward P/E ratio of 11.61, which is a discount compared to the industry average Forward P/E of 31.31 [5]. - The company has a PEG ratio of 0.38, significantly lower than the Internet - Software industry average PEG ratio of 2.28 [6]. Group 5: Industry Ranking - The Internet - Software industry, which includes StoneCo, has a Zacks Industry Rank of 73, placing it in the top 30% of over 250 industries [6]. - The Zacks Rank system indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7].

Core Viewpoint - StoneCo Ltd. is experiencing solid improvement in earnings estimates, which is likely to positively impact its stock price momentum [1][2]. Earnings Estimate Revisions - Analysts show growing optimism regarding StoneCo's earnings prospects, reflected in upward revisions of earnings estimates [2]. - The current-quarter earnings estimate is $0.41 per share, representing a year-over-year increase of +17.1% [5]. - Over the last 30 days, the Zacks Consensus Estimate for StoneCo has increased by 13.89%, with one estimate moving higher and no negative revisions [5]. - For the full year, the expected earnings are $1.63 per share, indicating a year-over-year change of +20.7% [6]. - The consensus estimate for the current year has risen by 9.62% due to two upward revisions and no negative changes [6][7]. Zacks Rank and Performance - StoneCo has achieved a Zacks Rank 2 (Buy), indicating favorable conditions for investment based on earnings estimate revisions [8]. - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500 [8]. - The stock has gained 24.4% over the past four weeks, driven by solid estimate revisions and positive earnings growth prospects [9].

Group 1 - StoneCo Ltd. (STNE) is a notable stock in the Computer and Technology sector, which is currently ranked 3 within the Zacks Sector Rank [2] - The Zacks Rank system indicates that StoneCo Ltd. has a strong buy rating with a Zacks Rank of 1, suggesting a favorable earnings outlook [3] - Year-to-date, StoneCo Ltd. has returned approximately 143.4%, significantly outperforming the average sector return of 22.4% [4] Group 2 - StoneCo Ltd. is part of the Internet - Software industry, which includes 172 stocks and is currently ranked 71 in the Zacks Industry Rank [6] - The Internet - Software industry has an average year-to-date gain of 26.5%, indicating that StoneCo Ltd. is performing better than its industry peers [6] - Another stock in the Computer and Technology sector, Flux Power Holdings, Inc. (FLUX), has also shown strong performance with a year-to-date increase of 63.3% [5][7]

Group 1 - StoneCo Ltd. (STNE) stock increased by 1.15% to $19.40, outperforming the S&P 500's daily gain of 0.49% and the Dow's gain of 0.38% [1] - Over the prior period, StoneCo shares gained 29.33%, significantly exceeding the Computer and Technology sector's gain of 6.81% and the S&P 500's gain of 2.99% [1] Group 2 - Upcoming earnings disclosure is anticipated, with an expected EPS of $0.39, reflecting an 11.43% growth year-over-year, and projected revenue of $661.83 million, up 9.31% from the previous year [2] - For the entire fiscal year, earnings are estimated at $1.54 per share and revenue at $2.65 billion, indicating increases of 14.07% and 7.56% respectively from the prior year [3] Group 3 - Recent modifications to analyst estimates for StoneCo Ltd. indicate changing near-term business trends, with positive revisions suggesting analyst optimism regarding the company's profitability [4] - The Zacks Rank system, which incorporates estimate changes, currently ranks StoneCo Ltd. as 1 (Strong Buy), with a 3.36% rise in the Zacks Consensus EPS estimate over the past month [6] Group 4 - StoneCo Ltd. has a Forward P/E ratio of 12.45, which is a discount compared to the industry average of 32.6, and a PEG ratio of 0.41, significantly lower than the Internet-Software industry average of 2.33 [7] - The Internet-Software industry ranks in the top 26% of all industries, with a Zacks Industry Rank of 64, indicating strong performance potential [8]

Core Idea - The article emphasizes the investment philosophy of Thomas W. Phelps, particularly his book "100 to 1 in the Stock Market," which advocates for buying exceptional companies early, holding them with discipline, and allowing compounding to generate wealth [1][4][6]. Phelps's Investment Framework - Phelps's framework focuses on identifying companies with durable advantages, such as network effects, proprietary know-how, and advantageous cost structures [8]. - The importance of verifying a large addressable market that allows for long-term compounding without hitting a wall is highlighted [8]. - Present-tense profitability is essential; Phelps preferred companies that generate cash rather than speculative ventures [8]. - The article suggests buying companies when their narratives are still forming, favoring modest valuations over those priced for perfection [8]. - A strategy of doing less is recommended, as holding onto winning investments can lead to tax deferral and reduced errors [8]. Current Investment Candidates - The article lists 25 companies that fit Phelps's criteria, categorized by how they create competitive advantages rather than by index labels [9]. - Companies in the construction and infrastructure sector, such as EMCOR Group and Quanta Services, are noted for their execution capabilities and ability to convert backlog into cash [10][11]. - Precision manufacturers like Celestica and Fabrinet are recognized for their high returns on capital and asset-light models [12]. - In network infrastructure, Arista Networks and Super Micro Computer are highlighted for their strong positions in high-speed switching and AI hardware, respectively [13]. - Companies in the materials sector, such as Martin Marietta Materials, are noted for their pricing power and local monopolies [14]. - Engineering firms like WSP Global are recognized for their expertise and customer relationships in regulated markets [15]. - Consumer brands like e.l.f. Beauty and Academy Sports are mentioned for their market share growth and operational efficiency [16]. - Specialty finance companies like FirstCash and software firms like Agilysys are noted for their cash generation and growth potential [17]. - Internationally, utilities like Sabesp and fintechs like StoneCo are highlighted for their governance and profitability improvements [18]. - UK companies like Spectris and Halma are recognized for their consistent acquisition strategies and operational excellence [19]. Conclusion - The article concludes that the focus should be on finding real engines of growth and sizing investments appropriately to endure market volatility, allowing time to enhance value [22].

Company Overview - Nu Holdings Ltd. is a leading digital banking platform in Latin America, providing services such as credit cards, personal loans, and savings accounts, and is recognized for its innovative use of technology in banking [1] Financial Performance - Nu Holdings has a Return on Invested Capital (ROIC) of 5.51%, which is below its Weighted Average Cost of Capital (WACC) of 11.72%, resulting in a ROIC to WACC ratio of 0.47, indicating a need for improved operational efficiency [2][6] - StoneCo Ltd. demonstrates strong financial performance with a ROIC of 38.70% and a WACC of 11.08%, leading to a ROIC to WACC ratio of 3.49, showcasing effective capital utilization [3][6] - SoFi Technologies, Inc. has a ROIC of 4.93% against a higher WACC of 14.69%, resulting in a ROIC to WACC ratio of 0.34, suggesting potential long-term financial sustainability issues [4][6] - Grab Holdings Limited and Affirm Holdings, Inc. report negative ROIC figures, with GRAB at -0.11% and AFRM at -0.66%, indicating significant challenges in generating returns above their cost of capital [5][6]

Core Insights - StoneCo and UiPath are highlighted as affordable tech stocks under $20, both benefiting from positive earnings estimate revisions and strong industry rankings [1][11] Company Overview - StoneCo specializes in financial technology solutions for e-commerce in Brazil, while UiPath focuses on Robotic Process Automation for digital business operations [2] Sales Growth - StoneCo's annual sales surged from $644 million in 2020 to over $2.4 billion in the last year, with expectations of a 7% increase in fiscal 2025 and a further 5% rise in FY26 to $2.78 billion [3] - UiPath's sales are projected to grow by 10% in fiscal 2026 and by another 8% in FY27, reaching $1.7 billion [4] Earnings Estimates - StoneCo's EPS estimates for FY25 and FY26 have increased by over 7% in the last 60 days, indicating strong growth potential [8] - UiPath's EPS revisions for FY26 and FY27 have risen over 14% in the past two months, suggesting a potential rebound [9] Valuation and Market Position - Both companies are trading under 20X forward earnings, making them attractive investment opportunities despite not being classified as "cheap" [11]

Core Insights - The fintech industry is highly competitive, with PayPal and StoneCo as prominent players, each focusing on different market segments [1][2] - PayPal is evolving into a comprehensive commerce ecosystem, while StoneCo is concentrating on micro, small, and medium-sized businesses in Brazil and Latin America [1][2] PayPal Overview - PayPal is focusing on four strategic growth pillars: winning checkout, scaling omni, growing Venmo, and driving PSP profitability [3] - Venmo's revenue increased over 20% in Q2, with total payment volume (TPV) growing 12%, marking the highest growth rate in three years [3] - Branded checkout is a significant growth driver, with over 60% of branded volume in the U.S. flowing through PayPal's enhanced platform [4] - PayPal launched PayPal World, a global wallet partnership, expanding access to over 2 billion consumers [5] - Despite a 6% rise in TPV, payment transactions fell by 5%, indicating some engagement challenges [6] StoneCo Overview - StoneCo reported a 27% year-over-year growth in adjusted net income and a consolidated ROE of 22% in Q2 2025 [7] - The company is divesting non-core assets to focus on financial services, targeting a total addressable market of BRL 100 billion [7] - The MSMB payments segment grew, with a 17% increase in active clients and a 12% rise in total payment volume [8] - Banking active clients increased by 23% to 3.3 million, with client deposits up 36% year over year [9] - StoneCo's disciplined approach to credit provisioning and funding costs supports its growth strategy [10] Financial Performance and Estimates - PayPal's 2025 sales and EPS estimates suggest increases of 3.97% and 12.47%, respectively [11] - StoneCo's 2025 sales are expected to rise by 7.56%, with EPS projected to jump by 14.07% [12] - PayPal shares are trading at a forward P/E of 11.99X, while StoneCo is at 10.93X [14] Market Positioning - Over the past three months, StoneCo has outperformed PayPal and the S&P 500 [15] - PayPal's global scale and diverse offerings appeal to investors, while StoneCo's focus on Brazil's MSMB segment presents significant growth potential [18] - StoneCo is viewed as a more compelling buy for growth-oriented investors, currently holding a Zacks Rank 1 (Strong Buy) compared to PayPal's Zacks Rank 2 (Buy) [19]

Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.Whil ...

Core Insights - StoneCo Ltd. experienced a significant decline in share price following disappointing results in 2020 and 2021 after a hike during the pandemic [1] - The company has shown a strong recovery over the past three years, delivering robust earnings and strong cash flow [1] Company Performance - StoneCo Ltd. faced challenges in 2020 and 2021, leading to a steep decline in share price [1] - The company has since recovered well, indicating a positive turnaround in its financial performance [1] Investment Perspective - The article reflects a focus on identifying undervalued stocks, particularly in the Latin American market, with an emphasis on long-term value [1]