Core Viewpoint - The article discusses the effectiveness of a hybrid investing strategy known as GARP (Growth at a Reasonable Price), which combines elements of both value and growth investing, particularly in times of market instability [1][2][4]. GARP Strategy - GARP investing seeks stocks that are undervalued while also having solid sustainable growth potential, utilizing the PEG (Price/Earnings to Growth) ratio as a key metric [4][5]. - A lower PEG ratio, ideally below 1, indicates both undervaluation and future growth potential, making it attractive for GARP investors [6]. Screening Criteria for GARP - Successful GARP investments should meet several criteria, including: - PEG Ratio less than the industry median - P/E Ratio (using F1) less than the industry median - Zacks Rank of 1 (Strong Buy) or 2 (Buy) - Market Capitalization greater than $1 billion - Average 20-Day Volume greater than 50,000 - Percentage Change in F1 Earnings Estimate Revisions (4 Weeks) greater than 5% - Value Score of A or B [8][9]. Selected Stocks - **StoneCo Ltd. (STNE)**: A Brazilian financial technology company with a Zacks Rank of 1 and a Value Score of B, showing a long-term expected earnings growth rate of 26.3% [10][11]. - **BGC Group, Inc. (BGC)**: A global marketplace and financial technology services company, also with a Zacks Rank of 1 and a Value Score of B, and a long-term expected growth rate of 24.7% [12][13]. - **Qifu Technology, Inc. (QFIN)**: An AI-driven Credit-Tech platform in China, holding a Zacks Rank of 1 and a Value Score of A, with a 39.1% earnings growth rate over the last five years [14][15]. - **Universal Health Services (UHS)**: Operates various healthcare facilities, with a Zacks Rank of 1 and a Value Score of A, and a long-term expected earnings growth rate of 16.9% [16][17].

Core Insights - Workiva (WK) is positioned as a key player in the U.S. federal government's financial modernization efforts, being the only sanctioned platform for financial reporting and Governance, Risk, and Compliance [1][2] Group 1: Government Initiatives - A new executive order mandates all federal agencies to consolidate their core financial systems within 180 days of March 25, 2025, aiming to enhance transparency and reduce fraud [2] - Federal CFOs are required to adopt FM Marketplace-approved platforms like Workiva to comply with this directive [2] - The order is a response to significant financial reporting issues, with 25% of CFO Act agencies receiving problematic audit opinions in 2024 [3] Group 2: Workiva's Platform Features - Workiva's platform provides a comprehensive digital transformation solution, integrating with over 100 source systems, offering real-time data updates, automated workflows, and FedRAMP-certified audit trails [3][4] - The FedRAMP authorization at the moderate security impact level ensures compliance with federal security standards, facilitating adoption across government agencies [4] Group 3: Financial Performance and Market Position - Workiva's shares have declined by 36.7% year to date, underperforming the broader Zacks Computer and Technology sector's 14% decline and the Zacks Internet - Software industry's 11.1% fall [5] - The decline is attributed to a cautious outlook for operating margins, with a GAAP operating margin of -14.3% and non-GAAP margin near break-even, indicating profitability challenges [6] - Despite these challenges, Workiva's integrated reporting platform and consistent subscription revenue growth suggest strong long-term potential, with projected year-over-year growth of 16-17% for Q1 2025 [7] Group 4: Future Guidance - For 2025, Workiva projects total revenues of $864-$868 million, indicating a year-over-year growth of 17-17.5% [8] - Non-GAAP earnings are expected to be between $1.02 and $1.09 per share, with the Zacks Consensus Estimate for earnings at $1.05 per share, reflecting an 11.7% year-over-year increase [8]

Industry Overview - The Internet Software and Services sector is experiencing growth due to increased IT spending on hybrid operating environments and the high penetration of mobile devices, prompting businesses to invest in web-based infrastructure, applications, and security software [1][3] - The Internet Software industry is ranked in the top 37% of Zacks Industry Rank, indicating an expectation to outperform the market in the next three to six months [2] Growth Drivers - The industry is benefiting from the global digital transformation and the rapid adoption of Software as a Service (SaaS), which provides flexible and cost-effective application delivery [3] - There is a growing demand for web-based cybersecurity software due to the need to secure cloud platforms against cyber-attacks, leading to increased demand for performance management monitoring tools [5] Company Highlights Affirm Holdings Inc. (AFRM) - Affirm is projected to achieve revenues between $3.13 billion and $3.19 billion in fiscal 2025, driven by growing active merchant numbers and partnerships with companies like Apple Pay [11] - The expected revenue and earnings growth rates for Affirm are 36.9% and 96.4%, respectively, for the current year, with a short-term price target indicating a potential upside of 112.4% from the last closing price of $40.49 [12][13] Five9 Inc. (FIVN) - Five9 offers intelligent cloud software for contact centers, benefiting from the adoption of AI tools, with a focus on personalized AI agents [14][16] - The expected revenue and earnings growth rates for Five9 are 9.8% and 5.7%, respectively, with a short-term price target suggesting a maximum upside of 190.4% from the last closing price of $23.07 [17] Unity Software Inc. (U) - Unity provides a platform for creating interactive, real-time 3D content across various devices, catering to developers and content creators [18][19] - The expected revenue and earnings growth rates for Unity are -2% and 31%, respectively, with a short-term price target indicating a potential upside of 82% from the last closing price of $19.23 [20][21] Olo Inc. (OLO) - Olo operates an open SaaS platform for restaurants, facilitating digital ordering and payment solutions, enhancing guest experiences [22][23] - The expected revenue and earnings growth rates for Olo are 17.5% and 40.9%, respectively, with a short-term price target suggesting a maximum upside of 62.1% from the last closing price of $6.17 [25] StoneCo Ltd. (STNE) - StoneCo provides financial technology solutions for electronic commerce in Brazil, distributing through proprietary Stone Hubs [26] - The expected revenue and earnings growth rates for StoneCo are 4.1% and -6.7%, respectively, with a short-term price target indicating a potential upside of 90.8% from the last closing price of $11.53 [27][28]

Five9 (FIVN) shares have dropped 42.8% year to date (YTD), underperforming the Zacks Computer and Technology sector’s decline of 12.5% and the Zacks Internet – Software industry’s fall of 11.1%.FIVN has underperformed its industry peers, StoneCo (STNE) , BlackBerry (BB) and Affirm (AFRM) .Over the same time frame, StoneCo shares have risen 37.8%, while BlackBerry and Affirm shares have lost 16.9% and 33.1%, respectively.This underperformance raises the question of whether investors should cut their losses a ...

Core Insights - StoneCo Ltd. is positioned to potentially continue its earnings-beat streak in the upcoming report, having achieved an average surprise of 15.63% over the last two quarters [1][5]. Earnings Performance - In the last reported quarter, StoneCo posted earnings of $0.39 per share, exceeding the Zacks Consensus Estimate of $0.32 per share, resulting in a surprise of 21.88% [2]. - In the previous quarter, the company was expected to earn $0.32 per share but delivered $0.35 per share, achieving a surprise of 9.38% [2]. Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for StoneCo, with a positive Earnings ESP of +5.17%, indicating bullish sentiment among analysts regarding the company's earnings prospects [5][8]. - The combination of a positive Earnings ESP and a Zacks Rank 1 (Strong Buy) suggests a high likelihood of another earnings beat in the upcoming report, expected on May 8, 2025 [8]. Statistical Insights - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise [6]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions [7].

StoneCo Ltd. (STNE) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.The upward trend in estimate revisions for this company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in ...

Core Viewpoint - StoneCo Ltd. has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for StoneCo suggest an improvement in the company's underlying business, likely leading to increased stock prices [5][10]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, indicating superior earnings estimate revisions [9][10]. Recent Earnings Estimate Revisions for StoneCo - For the fiscal year ending December 2025, StoneCo is expected to earn $1.26 per share, reflecting a -6.7% change from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for StoneCo has increased by 5.3%, indicating positive sentiment among analysts [8].

Core Viewpoint - The article discusses the investment positions and recommendations of The Motley Fool, particularly focusing on StoneCo, highlighting its potential as an investment opportunity [1] Company Analysis - The Motley Fool has positions in and recommends StoneCo, indicating a positive outlook on the company's performance and growth potential [1] - Parkev Tatevosian, CFA, is affiliated with The Motley Fool, suggesting that his insights may align with the company's investment strategies [1] Disclosure and Compensation - The article mentions that Parkev Tatevosian may be compensated for promoting The Motley Fool's services, which could influence his opinions [1] - The Motley Fool has a disclosure policy, ensuring transparency regarding its investment positions and recommendations [1]

Group 1: Stock Performance and Price Targets - StoneCo Ltd. (STNE) closed at $10.62, with a 14.7% gain over the past four weeks, and a mean price target of $13.41 indicating a 26.3% upside potential [1] - The average of 10 short-term price targets ranges from a low of $6 to a high of $22, with a standard deviation of $5.05, suggesting variability in analyst estimates [2] - The lowest estimate indicates a potential decline of 43.5%, while the most optimistic estimate suggests a 107.2% upside [2] Group 2: Analyst Consensus and Earnings Estimates - Analysts show strong agreement on the company's ability to report better earnings than previously predicted, which supports the view of potential upside [4] - The Zacks Consensus Estimate for the current year has increased by 3.2% due to one estimate moving higher over the last 30 days without any negative revisions [11] - STNE holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [12] Group 3: Price Target Reliability and Analyst Behavior - Price targets set by analysts are often questioned for their reliability, as empirical research indicates they rarely predict actual stock price movements [6][9] - Analysts may set overly optimistic price targets due to business incentives related to their firms' interests in the companies they cover [7] - A low standard deviation in price targets indicates a high degree of agreement among analysts regarding the stock's price movement direction, serving as a starting point for further research [8]

Group 1 - StoneCo Ltd. (STNE) has reached an important support level and surpassed resistance at the 200-day moving average, indicating a long-term bullish trend [1][2] - STNE has moved 19.8% higher over the last four weeks, suggesting potential for further gains [2] - The company is currently rated as a Zacks Rank 2 (Buy), reflecting positive market sentiment [2] Group 2 - Earnings estimate revisions for STNE show one upward revision and no downward revisions for the current fiscal year, indicating a positive outlook [3] - The consensus earnings estimate for STNE has also increased, further supporting the bullish sentiment [3] - Investors are encouraged to monitor STNE for potential gains due to its key technical levels and favorable earnings revisions [3]