Down 22.3% in 4 Weeks, Here's Why StoneCo (STNE) Looks Ripe for a Turnaround

Core Viewpoint - StoneCo Ltd. (STNE) has experienced a significant downtrend, with a 22.3% decline in stock price over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Technical Analysis - The Relative Strength Index (RSI) is a key technical indicator used to determine if a stock is oversold, with readings below 30 indicating oversold conditions [2]. - STNE's current RSI reading is 25.65, indicating that the heavy selling pressure may be exhausting itself, suggesting a possible reversal in the stock's trend [5]. Group 2: Fundamental Analysis - Analysts have shown strong agreement in raising earnings estimates for STNE, with a 1% increase in the consensus EPS estimate over the last 30 days, which typically correlates with price appreciation [7]. - STNE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a near-term turnaround [8].