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StoneCo Ltd. (STNE): A Bear Case Theory
StoneCo Ltd. (STNE): A Bear Case Theory

Yahoo

time5 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.

Top 4 Value Stocks to Buy as Trade Tensions Still Cloud H2 Outlook
Top 4 Value Stocks to Buy as Trade Tensions Still Cloud H2 Outlook

Yahoo

time03-06-2025

  • 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

Zacks.com featured highlights StoneCo, Centene, CVS Health and Pfizer
Zacks.com featured highlights StoneCo, Centene, CVS Health and Pfizer

Yahoo

time14-05-2025

  • Business
  • Yahoo

Zacks.com featured highlights StoneCo, Centene, CVS Health and Pfizer

Chicago, IL – May 14, 2025 – The stocks in this week's article are StoneCo Ltd. STNE, Centene Corp. CNC, CVS Health Corp. CVS and Pfizer Inc. PFE. Wall Street saw a strong rally on Monday, driven by renewed optimism over U.S.-China trade relations. A 90-day agreement between the two nations to reduce tariffs has rekindled hopes of easing global trade tensions. The United States will lower duties on Chinese imports from a steep 145% to 30%, while China has agreed to cut its retaliatory tariffs on American goods from 125% to 10%, signaling a shift from confrontation to cooperation. Markets responded positively, with the S&P 500 jumping 3.3% to settle at 5,844.19, while the Nasdaq Composite posted a stronger performance, climbing 4.4% to close at 18,708.34. The Dow Jones Industrial Average gained 2.8% to finish at 42,410.10. With markets bouncing back and sentiment improving, now may be an opportune moment to shift focus toward value stocks. As trade fears cool, companies with strong fundamentals but beaten-down prices could outperform. When evaluating value stocks, one of the most effective valuation metrics is the Price to Cash Flow (P/CF) ratio. Companies like StoneCo Ltd., Centene Corp., CVS Health Corp. and Pfizer Inc. boast a low P/CF ratio. The P/CF ratio evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis — the lower the number, the better. Value investing is considered one of the best practices when it comes to picking stocks. It is essentially about selecting stocks that are fundamentally sound but have been beaten down by some external factors. Such stocks are poised to bounce back as and when investors recognize the inherent value of companies. Certainly, the value investment strategy best suits investors with a long-term horizon. There are different valuation metrics to determine a stock's inherent strength. Still, a random selection of a ratio cannot serve your purpose if you want a realistic assessment of a company's financial position. For this, the Price to Cash Flow (or P/CF) ratio is one of the key metrics. Price-to-Cash-Flow metric evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis — the lower the number, the better. One of the important factors that makes P/CF a highly dependable metric is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, truly diagnosing a company's financial health. Analysts caution that a company's earnings are subject to accounting estimates and management manipulation. However, cash flow is reliable. Net cash flow unveils how much money a company is actually generating and how effectively management is deploying the same. Positive cash flow indicates an increase in a company's liquid assets. It gives the company the means to settle debt, meet its expenses, reinvest in its business, endure downturns and finally pay back its shareholders. Negative cash flow implies a decline in the company's liquidity, which in turn lowers its flexibility to support these moves. An investment decision based solely on the P/CF metric may not yield 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 trap. Here are the parameters for selecting true-value stocks: Here are four of the 16 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 here. The Zacks Consensus Estimate for Stone's current financial year sales and earnings per share (EPS) suggests growth of 9.8% and 2.2%, respectively, from the year-ago period. STNE has a Value Score of B. Shares of STNE have fallen 12.3% in the past year. Centene, 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 10.3% and 1.4%, respectively, from the year-ago period. Centene has a Value Score of A. Shares of Centene have declined 18.2% in the past year. CVS 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 3.6% and 11.8%, respectively, from the year-ago period. CVS Health has a Value Score of A. Shares of CVS have jumped 15.7% in the past year. Pfizer, 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 average. The Zacks Consensus Estimate for Pfizer's current financial year sales and EPS suggests a decline of 0.7% and 1%, respectively, from the year-ago period. Pfizer has a Value Score of A. Shares of PFE have fallen 18.6% in the past year. You 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 plunge. 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 to the Research Wizard today. Disclosure: Officers, directors and 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 mentioned in this material. Disclosure: Performance information for Zacks' portfolios and strategies is available at: Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year. Today you can access their live picks without cost or obligation. See Stocks Free >> 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 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

4 Value Picks to Ride the Market Rebound After US-China Trade Thaw
4 Value Picks to Ride the Market Rebound After US-China Trade Thaw

Yahoo

time13-05-2025

  • Business
  • Yahoo

4 Value Picks to Ride the Market Rebound After US-China Trade Thaw

Wall Street saw a strong rally on Monday, driven by renewed optimism over U.S.-China trade relations. A 90-day agreement between the two nations to reduce tariffs has rekindled hopes of easing global trade tensions. The United States will lower duties on Chinese imports from a steep 145% to 30%, while China has agreed to cut its retaliatory tariffs on American goods from 125% to 10%, signaling a shift from confrontation to responded positively, with the S&P 500 jumping 3.3% to settle at 5,844.19, while the Nasdaq Composite posted a stronger performance, climbing 4.4% to close at 18,708.34. The Dow Jones Industrial Average gained 2.8% to finish at 42, markets bouncing back and sentiment improving, now may be an opportune moment to shift focus toward value stocks. As trade fears cool, companies with strong fundamentals but beaten-down prices could outperform. When evaluating value stocks, one of the most effective valuation metrics is the Price to Cash Flow (P/CF) ratio. Companies like StoneCo Ltd. STNE, Centene Corporation CNC, CVS Health Corporation CVS and Pfizer Inc. PFE boast a low P/CF ratio. The P/CF ratio evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis — the lower the number, the better. Value investing is considered one of the best practices when it comes to picking stocks. It is essentially about selecting stocks that are fundamentally sound but have been beaten down by some external factors. Such stocks are poised to bounce back as and when investors recognize the inherent value of companies. Certainly, the value investment strategy best suits investors with a long-term are different valuation metrics to determine a stock's inherent strength. Still, a random selection of a ratio cannot serve your purpose if you want a realistic assessment of a company's financial position. For this, the Price to Cash Flow (or P/CF) ratio is one of the key metrics. Price-to-Cash-Flow metric evaluates the market price of a stock relative to the amount of cash flow that the company is generating on a per-share basis — the lower the number, the better. One of the important factors that makes P/CF a highly dependable metric is that operating cash flow adds back non-cash charges such as depreciation and amortization to net income, truly diagnosing a company's financial caution that a company's earnings are subject to accounting estimates and management manipulation. However, cash flow is reliable. Net cash flow unveils how much money a company is actually generating and how effectively management is deploying the cash flow indicates an increase in a company's liquid assets. It gives the company the means to settle debt, meet its expenses, reinvest in its business, endure downturns and finally pay back its shareholders. Negative cash flow implies a decline in the company's liquidity, which in turn lowers its flexibility to support these moves. An investment decision based solely on the P/CF metric may not yield 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 gives 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 Zacks Rank #1 or 2, offer the best upside are four of the 16 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 9.8% and 2.2%, respectively, from the year-ago period. STNE has a Value Score of B. Shares of STNE have fallen 12.3% 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 10.3% and 1.4%, respectively, from the year-ago period. Centene has a Value Score of A. Shares of Centene have declined 18.2% 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 3.6% and 11.8%, respectively, from the year-ago period. CVS Health has a Value Score of A. Shares of CVS have jumped 15.7% 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 suggests a decline of 0.7% and 1%, respectively, from the year-ago period. Pfizer has a Value Score of A. Shares of PFE have fallen 18.6% 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 Performance information for Zacks' portfolios and strategies are 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

Earnings Estimates Rising for StoneCo (STNE): Will It Gain?
Earnings Estimates Rising for StoneCo (STNE): Will It Gain?

Yahoo

time13-05-2025

  • Business
  • Yahoo

Earnings Estimates Rising for StoneCo (STNE): Will It Gain?

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. Analysts' growing optimism on the earnings prospects of this company is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. Our stock rating tool -- the Zacks Rank -- is principally built on this insight. The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. For StoneCo, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year. The chart below shows the evolution of forward 12-month Zacks Consensus EPS estimate: The company is expected to earn $0.32 per share for the current quarter, which represents a year-over-year change of +6.67%. Over the last 30 days, the Zacks Consensus Estimate for StoneCo has increased 14.29% because one estimate has moved higher compared to no negative revisions. For the full year, the company is expected to earn $1.38 per share, representing a year-over-year change of +2.22%. In terms of estimate revisions, the trend for the current year also appears quite encouraging for StoneCo. Over the past month, one estimate has moved higher compared to no negative revisions, helping the consensus estimate increase 9.5%. Thanks to promising estimate revisions, StoneCo currently carries a Zacks Rank #1 (Strong Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500. StoneCo shares have added 18.4% over the past four weeks, suggesting that investors are betting on its impressive estimate revisions. So, you may consider adding it to your portfolio right away to benefit from its earnings growth prospects. 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 Sign in to access your portfolio

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