Latest news with #StoneCo
Yahoo
7 days ago
- 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
30-05-2025
- Business
- Yahoo
StoneCo vs. Block: Which Fintech Stock is a Smarter Buy for 2025?
Brazil-based StoneCo STNE and U.S.-headquartered Block XYZ are two standout fintech players in 2025. Both companies operate integrated payment and financial service platforms tailored for small- and medium-sized merchants. StoneCo is off to a strong start this year with first-quarter adjusted earnings beating the Zacks Consensus Estimate by 6.3% and improving 17.2% year over year. Effective repricing execution and lower average funding spreads fueled a 19% increase in gross profit, reinforcing the company's disciplined approach to profitability. Block, on the other hand, posted a 28% increase in adjusted operating income and a 15% rise in adjusted EBITDA in the first quarter of 2025. Its Square segment delivered a 9% jump in gross profit, supported by GPV growth and broader banking product adoption. Strategic investments in AI, upmarket seller acquisition and field sales highlight the company's focus on innovation and scale. So, which fintech stock is better positioned to deliver an upside in 2025, StoneCo with its strong regional execution, or Block with its global innovation strategy? Let's take a closer look. Year to date, StoneCo shares have surged 67.3%, significantly outpacing the Internet-Software industry's 14.7% gain and the S&P 500's 0.8% rise. In contrast, Block shares have declined 27.3% during this period, mainly weighed down by weaker-than-expected Cash App performance. Image Source: Zacks Investment Research StoneCo Displays Strong Growth Momentum, Outpaces 2025 Guidance in Q1: StoneCo reported 19% year-over-year revenue growth in the first quarter of 2025, driven by strong performance across its payments, financial services, and software segments. Repricing initiatives and resilient client demand lifted Financial Services revenues by 20%, while Software revenue rose 11% on the back of a growing client base and larger average ticket sizes. Earnings also reflected solid operational execution, with adjusted EPS up 17.2% and adjusted basic EPS surging 36% year over year. Gross profit climbed 19%, supported by repricing, lower funding spreads, and disciplined cost control, enabling margin expansion despite macroeconomic headwinds. The company has already exceeded key 2025 targets, with first-quarter gross profit and basic EPS growth outpacing full-year guidance, underscoring strong momentum and the effectiveness of its cash sweep funding strategy. Image Source: Zacks Investment Research Disciplined Capital Deployment and Robust Shareholder Returns: Having identified R$3 billion in excess capital at the close of 2024, StoneCo has already returned approximately R$1 billion year to date through aggressive share repurchases. In first-quarter 2025 alone, StoneCo repurchased R$843 million worth of shares, contributing to a total of R$2.4 billion in buybacks over the past 12 months, driving a 12% distribution yield. The company also launched a new R$2 billion share repurchase program. Strong Momentum Across Square and Cash App Ecosystems: Square is regaining market share, with gross profit up 9% year over year and gross payment volume growing 8.2% on a constant currency basis. This reflects Block's effective product development and go-to-market strategies, including field sales, upmarket seller acquisitions and strategic partnerships. Cash App is set for network expansion, despite a soft quarter due to temporary tax refunds and spending shifts. Block is focusing on user growth among teens and families, while scaling Cash App Borrow after receiving FDIC approval for nationwide lending — a move expected to drive broader eligibility and better unit economics starting in the third quarter of 2025. Block is also unlocking new revenue streams. 'Cash App Afterpay,' a retroactive BNPL feature launched in February, is gaining early traction. Meanwhile, its Proto division plans to launch Bitcoin mining chips and systems in the second half of 2025, marking a bold step into digital asset infrastructure. Image Source: Zacks Investment Research Disciplined Financial Management and Shareholder Return: XYZ continues to demonstrate strong financial execution and discipline, with adjusted EBITDA rising 15% and adjusted operating income increasing 28% year over year. The company generated $1.53 billion in adjusted free cash flow over the trailing 12 months, up from $1.07 billion a year ago. In addition, Block is returning capital to shareholders, having repurchased $600 million in stock through April 2025. Management signaled intentions to continue buybacks. StoneCo is trading at a forward 12-month price-to-earnings (P/E) ratio of 8.75, above its one-year median of 8.20. Block's forward earnings multiple sits at 19.79, below its one-year median of 31.86. Meanwhile, both companies appear undervalued when compared with the industry's forward 12-month P/E of 37.59X. At present, STNE stays discounted compared to both XYZ and the industry. Image Source: Zacks Investment Research Given its robust financial momentum, disciplined cost management, and superior earnings execution, StoneCo, a Zacks Rank #1 (Strong Buy), presents a more compelling investment opportunity compared to Block, which carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank stocks here. StoneCo has consistently outperformed its own guidance, with first-quarter gross profit rising 19% year over year, exceeding the company's 14% target. On the other hand, while Block has shown positive signs of product innovation and is regaining momentum in Square, investor sentiment remains mixed due to Cash App's near-term softness and premium valuation. 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 StoneCo Ltd. (STNE) : Free Stock Analysis Report Block, Inc. (XYZ) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
26-05-2025
- Business
- Yahoo
Is StoneCo (STNE) a Buy as Wall Street Analysts Look Optimistic?
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter? Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about StoneCo Ltd. (STNE). StoneCo currently has an average brokerage recommendation (ABR) of 1.67, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by nine brokerage firms. An ABR of 1.67 approximates between Strong Buy and Buy. Of the nine recommendations that derive the current ABR, seven are Strong Buy, representing 77.8% of all recommendations. Check price target & stock forecast for StoneCo here>>>While the ABR calls for buying StoneCo, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential. Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation. This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements. With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near -term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision. In spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures. The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5. It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them. In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research. In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks. Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements. Looking at the earnings estimate revisions for StoneCo, the Zacks Consensus Estimate for the current year has increased 13.2% over the past month to $1.43. Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for StoneCo. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> Therefore, the Buy-equivalent ABR for StoneCo may serve as a useful guide for investors. 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 StoneCo Ltd. (STNE) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
23-05-2025
- Business
- Yahoo
Oddity Tech Soars 52% in a Month: Is the Stock Still Worth Buying?
Oddity Tech Ltd. ODD shares have rallied 51.9% over the past month, significantly outperforming the Zacks Computer and Technology sector's return of 15.5% and the Zacks Internet - Software industry's growth of 20.5%.The company has also outpaced industry peers, including Paylocity Holding PCTY, Audioeye AEYE and StoneCo STNE. Over the past month, shares of Paylocity Holding and Audioeye have returned 6.6% and 6.1%, respectively, while StoneCo has dropped 1%.ODD's outperformance can be attributed to its standout performance in the first quarter of 2025, driven by solid top and bottom-line growth. Revenues rose 27% year over year to $268 million, exceeding the Zacks Consensus Estimate by 2.86%. Earnings per share came in at 69 cents, representing a 13% increase from the prior year and surpassing expectations by 9.52%. This strong quarterly outperformance highlights the company's solid execution and sustained demand across its digital-first beauty industry's structural transformation, particularly the shift to online channels, continues to play to Oddity's strengths. As consumer preferences move increasingly toward digital-first experiences, the company is solidifying its leadership as a dominant B2C platform. ODDITY Tech Ltd. price-consensus-chart | ODDITY Tech Ltd. Quote Oddity Tech's strong performance continues to be anchored by its growing portfolio of high-performing consumer brands. Both IL Makiage and SpoiledChild delivered double-digit revenue growth in the first quarter, underscoring their central role in the company's momentum. These brands not only fuel current results but also provide a strong foundation for long-term growth and overall MAKIAGE remains the company's flagship brand and continues to perform ahead of expectations. Management reiterated confidence in achieving the brand's $1 billion revenue target by 2028. A key driver of this trajectory is IL Makiage Skin, which is anticipated to contribute nearly 40% of the brand's total revenues this SpoiledChild, now in its third year since launch, is quickly establishing itself as a formidable growth engine. The brand is on track to surpass $200 million in revenues in 2025, backed by healthy margins and strong consumer adoption. Oddity Tech continues to make significant strides in expanding its product portfolio, with its innovation pipeline playing a central role in its growth strategy. Development of Brand 3 is on track for a soft launch in the third quarter of 2025 and a full commercial rollout by year-end. Preparations are also underway for the launch of Brand 4 in 2026, reinforcing the company's commitment to sustained product development. Simultaneously, ODDITY LABS — the company's proprietary molecule discovery platform — remains a key driver of differentiation, strengthening its ability to deliver cutting-edge, science-driven products that resonate with modern international expansion is accelerating, with promising early results in key European markets. The company achieved double-digit growth in France, Italy and Spain, highlighting the success of its global scaling efforts. Management remains optimistic about the international opportunity, noting that while more than 80% of Oddity's revenues currently come from the United States, this opens the door for the company to build scale abroad and unlock new growth engines beyond its home market. For the second quarter of 2025, Oddity Tech expects total revenues of $235-$239 million, suggesting a 22-24% year-over-year increase. The Zacks Consensus Estimate for revenues is pegged at $237.22 million, indicating 23.06% year-over-year company expects adjusted earnings per share between 85 cents and 89 cents. The consensus mark for the second-quarter earnings is pegged at 88 cents per share, unchanged over the past 30 days, suggesting a year-over-year rise of 7.32%.For fiscal 2025, Oddity Tech anticipates revenues of $790-$798 million, suggesting 22-23% year-over-year growth. The Zacks Consensus Estimate for revenues is pegged at $796.37 million, indicating year-over-year growth of 23.08%.Adjusted earnings per share are expected to be $1.99-$2.04 per share. The consensus mark for earnings is pegged at $2.02 per share, up 3.1% in the past 30 days, suggesting a year-over-year rise of 3.06%.Oddity Tech's earnings beat the Zacks Consensus Estimate in the trailing four quarters, delivering an average earnings surprise of 32.80%. Oddity Tech presents a compelling investment opportunity, backed by strong revenue and earnings growth, highlighting a clear path to sustained profitability. Its double-digit growth in key markets, robust innovation pipeline and accelerating global expansion, combined with strong brand momentum, position Oddity Tech as a long-term value creator in the beauty and wellness all these factors, it is prudent to buy this Zacks Rank #1 (Strong Buy) stock right now. 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 Paylocity Holding Corporation (PCTY) : Free Stock Analysis Report Audioeye, Inc. (AEYE) : Free Stock Analysis Report StoneCo Ltd. (STNE) : Free Stock Analysis Report ODDITY Tech Ltd. (ODD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Business Insider
22-05-2025
- Business
- Business Insider
StoneCo upgraded to Outperform from Neutral at Grupo Santander
Grupo Santander upgraded StoneCo (STNE) to Outperform from Neutral with a $16 price target Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>>
