Here's Why StoneCo (STNE) is Poised for a Turnaround After Losing 22.3% in 4 Weeks

Core Viewpoint - StoneCo Ltd. (STNE) has experienced significant selling pressure, resulting in a 22.3% decline over the past four weeks, but analysts anticipate better earnings than previously predicted, indicating potential for recovery [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) is a momentum oscillator that helps identify whether a stock is oversold, with readings below 30 indicating oversold conditions [2]. - STNE's current RSI reading of 27.46 suggests that the heavy selling may be exhausting, indicating a potential bounce back towards equilibrium in supply and demand [5]. Group 2: Fundamental Analysis - There is a strong consensus among sell-side analysts to raise earnings estimates for STNE, with a 3.5% increase in the consensus EPS estimate over the last 30 days, which typically correlates with price appreciation [7]. - STNE holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a near-term turnaround [8].