Core Insights - The article highlights the investment strategies and achievements of Paul Franke, a seasoned investor with 38 years of trading experience, emphasizing his contrarian stock selection style and algorithmic analysis for identifying investment opportunities [1]. Group 1: Investment Strategies - Paul Franke developed a system called "Victory Formation," which focuses on supply/demand imbalances indicated by specific stock price and volume movements [1]. - The "Bottom Fishing Club" articles target deep-value stocks or those showing significant positive technical momentum reversals [1]. - The "Volume Breakout Report" articles analyze positive trend changes supported by strong price and volume trading actions [1]. Group 2: Performance and Recognition - Franke was consistently ranked among the top investment advisors nationally during the 1990s and achieved the 1 position in the Motley Fool® CAPS stock picking contest in 2008 and 2009, out of over 60,000 portfolios [1]. - As of September 2024, he is ranked in the Top 3% of bloggers by TipRanks® for 12-month stock picking performance over the last decade [1]. Group 3: Risk Management - Franke advises investors to implement stop-loss levels of 10% or 20% on individual stock choices and to maintain a diversified portfolio of at least 50 well-positioned stocks to enhance regular stock market outperformance [1].

Core Points - StoneCo Ltd. will announce its fourth quarter and fiscal year 2024 financial results on March 18th, 2025, after market close [1] - A conference call to discuss the results will take place on the same day at 5:00 PM ET [1] - The company will enter a Quiet Period starting February 28th, 2025, in relation to its financial results [3] Company Overview - Stone is a leading provider of financial technology and software solutions that enable merchants to conduct commerce seamlessly across multiple channels and support their business growth [4]

Core Viewpoint - The recommendation for StoneCo (NASDAQ: STNE) has been raised from hold to buy, indicating a positive outlook based on recent developments and market conditions [1]. Group 1: Company Analysis - The analyst has over 5 years of experience in equity analysis specifically in Latin America, which adds credibility to the insights provided [1]. - There are several signs indicating that an investment opportunity is emerging for StoneCo, suggesting a shift in market sentiment [1].

Core Viewpoint - StoneCo Ltd. is experiencing a decline in stock price and earnings projections, indicating potential challenges ahead for the company Group 1: Stock Performance - StoneCo Ltd. shares closed at $9.22, reflecting a -1.28% change from the previous day, underperforming the S&P 500 which gained 0.36% [1] - Over the past month, StoneCo Ltd. shares have increased by 17.19%, outperforming the Computer and Technology sector which saw no change and the S&P 500's gain of 2.11% [1] Group 2: Earnings Projections - StoneCo Ltd. is expected to report earnings of $0.32 per share, representing an 11.11% decline year-over-year [2] - Revenue is projected to be $581.37 million, indicating an 11.36% decrease compared to the same quarter of the previous year [2] Group 3: Analyst Estimates - Recent changes to analyst estimates for StoneCo Ltd. suggest a focus on short-term business trends, with positive revisions seen as a favorable sign for the company's outlook [3] Group 4: Zacks Rank and Valuation - StoneCo Ltd. currently holds a Zacks Rank of 4 (Sell), with the consensus EPS projection moving 3.89% lower in the past 30 days [5] - The company is trading at a Forward P/E ratio of 8.1, significantly lower than the industry's average Forward P/E of 31.23, and has a PEG ratio of 0.37 compared to the industry's average of 2.34 [6] Group 5: Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 73, placing it in the top 30% of over 250 industries [7]

Company Performance - StoneCo Ltd. closed at $8.84, reflecting a -0.79% change from the previous trading day's closing, underperforming the S&P 500's daily gain of 0.92% [1] - Over the past month, shares of StoneCo Ltd. gained 13.07%, outperforming the Computer and Technology sector, which saw a loss of 2.99%, and the S&P 500's gain of 0.81% [2] Earnings Expectations - The upcoming earnings report for StoneCo Ltd. is anticipated to show an EPS of $0.32, which is an 11.11% decrease from the same quarter last year [3] - Revenue is expected to be $585.02 million, down 10.8% from the prior-year quarter [3] Analyst Estimates and Rankings - Recent changes to analyst estimates for StoneCo Ltd. indicate a shifting business landscape, with positive revisions reflecting optimism about the company's profitability [4] - The Zacks Rank system currently rates StoneCo Ltd. as 4 (Sell), with a 3.89% decline in the Zacks Consensus EPS estimate over the past month [6] Valuation Metrics - StoneCo Ltd. is trading at a Forward P/E ratio of 7.73, significantly lower than the industry average of 31.2, indicating a discount relative to its peers [7] - The company has a PEG ratio of 0.36, compared to the Internet - Software industry's average PEG ratio of 2.19, suggesting favorable growth expectations relative to its valuation [8] Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 44, placing it in the top 18% of over 250 industries [9]

Group 1: Company Performance - StoneCo Ltd. ended the latest trading session at $8.58, reflecting a +1.66% adjustment from the previous day's close, outperforming the S&P 500's gain of 0.61% [1] - The company's shares gained 4.46% over the previous month, surpassing the Computer and Technology sector's gain of 1.24% and the S&P 500's gain of 2.08% [1] Group 2: Upcoming Financial Results - StoneCo Ltd.'s upcoming EPS is projected at $0.32, indicating an 11.11% decline compared to the same quarter of the previous year [2] - The Zacks Consensus Estimate for revenue is projecting net sales of $585.02 million, down 10.8% from the year-ago period [2] Group 3: Analyst Forecasts and Rankings - Recent revisions to analyst forecasts for StoneCo Ltd. are important as they reflect short-term business trends, with upward revisions indicating analysts' positivity towards the company's operations [3] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks StoneCo Ltd. at 4 (Sell), with a 12.41% fall in the Zacks Consensus EPS estimate over the past month [5] Group 4: Valuation Metrics - StoneCo Ltd. is trading with a Forward P/E ratio of 7.32, which is a discount compared to the industry's average Forward P/E of 29.01 [6] - The company has a PEG ratio of 0.34, significantly lower than the average PEG ratio of 2.19 for Internet - Software stocks [6] Group 5: Industry Context - The Internet - Software industry, which includes StoneCo Ltd., has a Zacks Industry Rank of 41, placing it in the top 17% of over 250 industries [7] - The Zacks Industry Rank measures the strength of industry groups, indicating that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

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]