Latest news with #STNE
Yahoo
2 days ago
- Business
- Yahoo
StoneCo Ltd. (STNE): A Bear Case Theory
We came across a bearish thesis on StoneCo Ltd. (STNE) on Quipus Capital's Substack. In this article, we will summarize the bears' thesis on STNE. StoneCo Ltd. (STNE)'s share was trading at $13.51 as of 6th June. STNE's trailing and forward P/E were 11.42 and 9.68 respectively according to Yahoo Finance. StoneCo Ltd. (STNE), is deeply entrenched in Brazil's payment processing ecosystem, with a business model centered on receivables discounting rather than the processing layer, which has been heavily commoditized. STNE advances funds to merchants on credit card sales, earning high-yield, low-risk returns that are essentially underwritten by card issuers or networks. This model thrives among small businesses with limited credit access, where urgency often trumps cost. However, STNE's growth potential faces headwinds in the market: a saturated market growing only in line with GDP plus inflation, and a capped receivables base tied to one month's worth of payment volumes. Compounding this is the risk posed by PIX Parcelado, a government-backed initiative allowing installment payments directly via banks, which could disintermediate STNE from the receivables chain. While STNE has explored traditional credit markets, its previous attempts led to high delinquencies and an eventual retreat. The company lacks the competitive advantage to rival Brazil's full-service digital and incumbent banks. Despite these challenges, STNE remains highly profitable, and management is focused on balance sheet optimization through share buybacks and modest leverage. Assuming stable pricing and spreads, STNE can deliver around 11% from buybacks at a 9x P/E, and add another 5–7% from underlying economic growth. While the upside from fixed-multiple returns and efficient capital allocation is compelling, it's counterbalanced by the real possibility of margin erosion or disintermediation. For investors, the key question is whether these tailwinds are enough to justify the risk of business model disruption in an evolving payments landscape. Previously, we summarized a bullish thesis on SoFi Technologies, highlighting its rapid digital bank user growth, expanding product engagement, and forward profitability inflection, framing its 2026 earnings potential as a catalyst for valuation rerating. The stock has appreciated by approximately 4% since the recent coverage. Together, these two theses present a tale of fintech divergence: one banking on digital ecosystem scale and future earnings leverage (SoFi), the other navigating a legacy-dependent niche facing structural headwinds (StoneCo) StoneCo Ltd. (STNE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held STNE at the end of the first quarter which was 24 in the previous quarter. While we acknowledge the risk and potential of STNE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
3 days ago
- Business
- Yahoo
StoneCo Ltd. (STNE): A Bear Case Theory
We came across a bearish thesis on StoneCo Ltd. (STNE) on Quipus Capital's Substack. In this article, we will summarize the bears' thesis on STNE. StoneCo Ltd. (STNE)'s share was trading at $13.51 as of 6th June. STNE's trailing and forward P/E were 11.42 and 9.68 respectively according to Yahoo Finance. StoneCo Ltd. (STNE), is deeply entrenched in Brazil's payment processing ecosystem, with a business model centered on receivables discounting rather than the processing layer, which has been heavily commoditized. STNE advances funds to merchants on credit card sales, earning high-yield, low-risk returns that are essentially underwritten by card issuers or networks. This model thrives among small businesses with limited credit access, where urgency often trumps cost. However, STNE's growth potential faces headwinds in the market: a saturated market growing only in line with GDP plus inflation, and a capped receivables base tied to one month's worth of payment volumes. Compounding this is the risk posed by PIX Parcelado, a government-backed initiative allowing installment payments directly via banks, which could disintermediate STNE from the receivables chain. While STNE has explored traditional credit markets, its previous attempts led to high delinquencies and an eventual retreat. The company lacks the competitive advantage to rival Brazil's full-service digital and incumbent banks. Despite these challenges, STNE remains highly profitable, and management is focused on balance sheet optimization through share buybacks and modest leverage. Assuming stable pricing and spreads, STNE can deliver around 11% from buybacks at a 9x P/E, and add another 5–7% from underlying economic growth. While the upside from fixed-multiple returns and efficient capital allocation is compelling, it's counterbalanced by the real possibility of margin erosion or disintermediation. For investors, the key question is whether these tailwinds are enough to justify the risk of business model disruption in an evolving payments landscape. Previously, we summarized a bullish thesis on SoFi Technologies, highlighting its rapid digital bank user growth, expanding product engagement, and forward profitability inflection, framing its 2026 earnings potential as a catalyst for valuation rerating. The stock has appreciated by approximately 4% since the recent coverage. Together, these two theses present a tale of fintech divergence: one banking on digital ecosystem scale and future earnings leverage (SoFi), the other navigating a legacy-dependent niche facing structural headwinds (StoneCo) StoneCo Ltd. (STNE) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held STNE at the end of the first quarter which was 24 in the previous quarter. While we acknowledge the risk and potential of STNE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
03-06-2025
- Business
- Yahoo
Fintech Tailwind and Cheap Valuation Make StoneCo a Buy Today
StoneCo Ltd. STNE, a leading provider of financial technology solutions in Brazil, stands to benefit significantly from the global fintech market's accelerating growth. As the market, valued at $340.10 billion in 2024, is projected to surpass $1.12 trillion by 2032 at a CAGR of 16.2% (Fortune Business Insights report), companies like StoneCo that offer digital payment processing and cloud-based financial services are poised for substantial growth. The increasing adoption of cloud computing, AI-driven fraud detection and mobile-first financial services aligns closely with StoneCo's business model. The surge in demand for real-time payments and secure digital transactions — trends especially prominent in emerging markets —further strengthens StoneCo's strategic positioning across Latin America's evolving digital economy. In the past three months, StoneCo shares have skyrocketed roughly 54.9%, outpacing the broader Internet–Software industry and the S&P 500 benchmark, which have improved by about 4.3% and 2.4%, respectively. During this time, StoneCo has also outpaced key fintech peers such as PagSeguro Digital PAGS and DLocal Limited DLO. While PagSeguro, known for its digital payment and financial services tailored to small and mid-sized businesses, gained 30.9%, cross-border payment platform DLocal advanced 18.2%. Image Source: Zacks Investment Research Repricing Power Accelerates Profitability: StoneCo's first-quarter 2025 results highlight the success of the strategic repricing initiatives, which helped drive gross profit by 19% year over year, well above its annual guidance of 14%. By adjusting prices across its client base in response to 2024's yield curve spike, the company not only protected margins but also enhanced earnings per share by 36%, doubling the 18% growth pace projected for the full year. Deposit Growth and Monetization of PIX Drive Financial Expansion: StoneCo continues to benefit from strong growth in its financial ecosystem. Client deposits rose 38% year over year to R$8.3 billion, with R$6.3 billion placed in time deposits under its cash sweep strategy, cutting funding costs and improving capital strength. Meanwhile, PIX transactions jumped 95% and are now monetized like debit payments. This helps offset declines in card usage, boosts deposit inflows, and supports future lending and efficiency. Based on short-term price targets offered by nine analysts, StoneCo is currently trading 11.6% below its average Zacks price target. Image Source: Zacks Investment Research STNE stock's Value Score of B suggests a discounted valuation at this moment. This is evident from the price/earnings ratio. StoneCo shares currently trade at 9.26X forward earnings, well off its five-year high of 87.87X and below its median of 21.13X. The stock is also trading significantly below the industry's price/earnings ratio of 37.60. The stock is also trading below DLocal's 16.4X forward earnings. PagSeguro Digital, meanwhile, trades at 6.96X. Image Source: Zacks Investment Research Given StoneCo's robust first-quarter performance, disciplined repricing strategy and monetization of PIX transactions, the company is quite clearly executing well on both growth and profitability fronts. Coupled with its discounted valuation relative to peers and historical averages, STNE stands out as an attractive opportunity. With a Zacks Rank #1 (Strong Buy), now may be an opportune time for investors to capitalize on StoneCo's momentum before the market fully prices in its upside potential. You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PagSeguro Digital Ltd. (PAGS) : Free Stock Analysis Report StoneCo Ltd. (STNE) : Free Stock Analysis Report DLocal Limited (DLO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-06-2025
- Business
- Yahoo
Top 4 Value Stocks to Buy as Trade Tensions Still Cloud H2 Outlook
The second half of 2025 has kicked off on a cautious note. While U.S. stocks opened June in positive territory, geopolitical tensions, particularly between the United States and China, continue to cast a shadow over the global economic outlook. Markets saw modest gains as investors brushed aside fresh accusations between the two superpowers regarding the breakdown of a temporary trade agreement. The S&P 500 edged up by 0.41%, closing at 5,935.94, while the Nasdaq Composite showed a stronger performance with a 0.67% increase, settling at 19,242.61. The Dow Jones Industrial Average also inched higher by 35.41 points, or 0.08%, ending the day at 42,305.48. This backdrop of rising uncertainty makes a compelling case for value investing. When evaluating value stocks, one of the most effective valuation metrics is the Price to Cash Flow (P/CF) ratio. This metric measures the market price of a stock relative to the cash flow the company generates on a per-share basis. A lower P/CF ratio indicates that the stock is trading at a better value, offering strong cash generation potential relative to its price. Here are four companies — StoneCo Ltd. STNE, Centene Corporation CNC, CVS Health Corporation CVS and Pfizer Inc. PFE. Questions may arise as to why we are considering the P/CF valuation metric when the most widely used metric is Price/Earnings (or P/E). Well, what makes P/CF stand out is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, reflecting a company's financial caution that a company's earnings are subject to accounting estimates and management manipulation. However, cash flow is reliable. It is net cash flow that reveals how much money a company is actually generating and how effectively management is putting the same to use.A positive cash flow indicates an increase in the company's liquid assets. This gives the company the means to settle debt, shell out for its expenses, reinvest in its business, endure downturns and finally pay back its shareholders. Then again, a negative cash flow implies a decline in the company's liquidity, which lowers its flexibility to support these moves. An investment decision solely based on the P/CF metric may not fetch the desired results. To identify stocks that are trading at a discount, you should expand your search criteria and also consider the price-to-book ratio, price-to-earnings ratio and price-to-sales ratio. Adding a favorable Zacks Rank and a Value Score of A or B to your search criteria should lead to even better results as these eliminate the chance of falling into a value are the parameters for selecting true-value stocks: P/CF less than or equal to X-Industry greater than or equal to 5: The stocks must all be trading at a minimum of $5 or 20-Day Volume greater than 100,000: A substantial trading volume ensures that the stock is easily tradable.P/E using (F1) less than or equal to X-Industry Median: This parameter shortlists stocks that are trading at a discount or are equal to their peers.P/B less than or equal to X-Industry Median: A lower P/B compared with the industry average implies that there is enough room for the stock to gain.P/S less than or equal to X-Industry Median: The P/S ratio determines how a stock price compares to the company's sales — the lower the ratio, the more attractive the stock less than 1: The ratio is used to determine a stock's value by taking the company's earnings growth into account. The PEG ratio portrays a more complete picture than the P/E ratio. A value of less than 1 indicates that the stock is undervalued and that investors need to pay less for a stock that has robust earnings growth Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform irrespective of the market Score of less than or equal to B: Our research shows that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside are four of the 14 value stocks that qualified the screening:Stone, a leading provider of financial technology and software solutions, sports a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 6.4%, on average. You can see the complete list of today's Zacks #1 Rank stocks Zacks Consensus Estimate for Stone's current financial year sales and earnings per share (EPS) suggests growth of 10.9% and 5.9%, respectively, from the year-ago period. STNE has a Value Score of B. Shares of STNE have risen 5.9% in the past a leading healthcare enterprise, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 25.5%, on average. (See the Zacks Earnings Calendar to stay ahead of market-making news.)The Zacks Consensus Estimate for Centene's current financial year sales and EPS implies growth of 10.2% and 1.4%, respectively, from the year-ago period. Centene has a Value Score of A. Shares of Centene have declined 21.7% in the past Health, a leading health solutions company, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 18.1%, on average. The Zacks Consensus Estimate for CVS Health's current financial-year sales and EPS suggests growth of 3.5% and 12.6%, respectively, from the year-ago period. CVS Health has a Value Score of A. Shares of CVS have jumped 5.6% in the past which develops, manufactures, markets, distributes and sells biopharmaceutical products, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 43.5%, on Zacks Consensus Estimate for Pfizer's current financial year sales and EPS calls for a decline of 0.6% and 1.6%, respectively, from the year-ago period. Pfizer has a Value Score of A. Shares of PFE have fallen 20.4% in the past can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and backtest them first before taking the investment Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come here to sign up for a free trial to the Research Wizard Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. Disclosure: Performance information for Zacks' portfolios and strategies is available at: Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Pfizer Inc. (PFE) : Free Stock Analysis Report CVS Health Corporation (CVS) : Free Stock Analysis Report Centene Corporation (CNC) : Free Stock Analysis Report StoneCo Ltd. (STNE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
30-05-2025
- Business
- Yahoo
Zacks.com featured highlights StoneCo, Intercontinental Exchange, Southwest Gas Holdings and The Mosaic
Chicago, IL – May 30, 2025 – The stocks in this week's article are StoneCo Ltd. STNE, Intercontinental Exchange, Inc. ICE, Southwest Gas Holdings, Inc. SWX and The Mosaic Co. MOS. Markets began 2025 on a strong footing but have since been gripped by heightened volatility because of the Trump administration's tariff plans, which have resulted in ambiguity. The uncertainty has clouded expectations around the tariffs' potential impact on the U.S. economy and the Federal Reserve's monetary policy decisions. Amid this backdrop, investors are approaching the markets with increased caution. Therefore, the conventional method of selecting stocks is the need of the hour. One such way is choosing stocks with steady sales growth. In this regard, StoneCo Ltd., Intercontinental Exchange, Inc., Southwest Gas Holdings, Inc. and The Mosaic Co. are worth investing in. When evaluating a company, revenues often receive more scrutiny than earnings. Investors focus on a business's ability to generate increasing sales over time, as this shows its potential to expand the customer base. In contrast, stagnant or declining sales may signal underlying headwinds. While a company can still generate profits in the short term, sustained growth is necessary to attract new investors. Strong revenue growth is also essential for long-term profitability. While earnings can be improved by cutting costs, consistent bottom-line expansion typically requires steady sales increases. Yet, sales growth alone cannot provide a proper picture of a company's financial health. Evaluating a company's cash position alongside its revenues is a more effective investment strategy. A strong cash balance and steady cash flow provide flexibility for strategic decisions, operational stability and future investments. You can see the complete list of today's Zacks #1 Rank stocks here. Cayman Islands-based StoneCo provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online and mobile channels in Brazil. STNE offers financial services, including payment, prepayment, digital banking and credit solutions. StoneCo's expected sales growth rate for 2025 is 12.2%. STNE sports a Zacks Rank #1 at present. Intercontinental Exchange, headquartered in Atlanta, GA, is a leading global operator of regulated exchanges, clearing houses and listings venues, and a provider of data services for commodity, financial, fixed-income and equity markets. ICE has evolved and grown over the past two decades, primarily on buyouts and collaborations. Intercontinental Exchange's expected sales growth rate for 2025 is 7.3%. ICE currently carries a Zacks Rank #2. Southwest Gas is an energy holding company based in Las Vegas, NV. SWX makes deliveries of natural gas under a priority system established by state regulatory commissions. Southwest Gas' sales are expected to rise 2.8% in 2025. SWX sports a Zacks Rank #1 at present. Tampa, FL-based Mosaic is a leading producer and marketer of concentrated phosphate and potash for the global agriculture industry. MOS is the biggest integrated phosphate producer globally and among the four largest potash producers in the world. Mosaic's expected sales growth for 2025 is 10.2%. MOS, at present, carries a Zacks Rank #2. Get the remaining stock on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software. The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out. Click here to sign up for a free trial of the Research Wizard today. For the rest of this Screen of the Week article please visit at: Follow us on Twitter: Join us on Facebook: Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates. Contact: Jim Giaquinto Company: Phone: 312-265-9268 Email: pr@ Visit: provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit for information about the performance numbers displayed in this press release. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intercontinental Exchange Inc. (ICE) : Free Stock Analysis Report Southwest Gas Corporation (SWX) : Free Stock Analysis Report The Mosaic Company (MOS) : Free Stock Analysis Report StoneCo Ltd. (STNE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
