Value
9.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 10.0 |
| P/S | 10.0 |
| EV/EBITDA | 10.0 |
| Fwd P/E | 10.0 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 4.6x
- ▸PEG: 0.02
- ▸Attractively valued
STNE · Why this verdict
Why StoneCo (STNE) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
StoneCo trades at a forward price-to-earnings ratio of 4.4x with a PEG ratio of 0.02 and a return on equity of 31%, representing a rare combination of deep-value pricing alongside strong profitability for a Brazilian fintech payments company. Valuation breakdown | The forward price-to-earnings multiple expands to above 7x within 12 months as investor confidence in earnings sustainability grows, implying more than 60% upside from current levels. | →Stable |
| CounterBrazilian fintech companies have historically traded at large discounts to US peers due to currency risk, regulatory uncertainty, and macroeconomic volatility; the 4.4x multiple may reflect appropriate Brazil-specific risk premiums rather than a valuation error. | ||
Earnings estimates are trending downward, which in conjunction with a 3-of-4 beat streak creates a conflicted picture where the company beats lowered expectations but fundamental expectations are declining. Bear case | Earnings estimates stabilize or turn upward within 2 quarters, with the company beating the stabilized consensus by at least 5% in the next 3 of 4 reported quarters. | →Stable |
| CounterDownward earnings estimate revisions in fintech companies often precede a multi-quarter period of fundamental deterioration; the trend direction of estimates may be more predictive than the beat streak when the two conflict. | ||
StoneCo is trading below all moving averages with a death cross in place, the 200-day average declining at 1.1% per month, MACD improving but still below zero, and on-balance volume falling — a combination that signals ongoing distribution. Momentum breakdown | Price crosses above the 200-day moving average within 6 months and on-balance volume turns positive for at least 30 consecutive days, confirming accumulation has replaced distribution. | →Stable |
| CounterDeath crosses in small-cap emerging market fintech stocks can persist for 12 to 18 months; the improving MACD is an early sign of recovery but is insufficient to confirm reversal without volume confirmation. | ||
Analyst consensus price targets imply approximately 59% upside from the current price of $10.99, while short interest of 10% creates a potential short-squeeze dynamic if fundamentals improve and bearish positions are unwound. Sentiment breakdown | Short interest falls below 6% within 12 months as the upside case gains traction, and the stock reaches at least $14, more than 27% above current price. | →Stable |
| CounterHigh short interest alongside downward earnings revisions may indicate that the bearish fundamental thesis is more current than the bullish analyst targets; shorts may be positioned on the most recent information. | ||
StoneCo trades at a forward price-to-earnings ratio of 4.4x with a PEG ratio of 0.02 and a return on equity of 31%, representing a rare combination of deep-value pricing alongside strong profitability for a Brazilian fintech payments company.
→StableValuation breakdown
- Expectation
- The forward price-to-earnings multiple expands to above 7x within 12 months as investor confidence in earnings sustainability grows, implying more than 60% upside from current levels.
CounterBrazilian fintech companies have historically traded at large discounts to US peers due to currency risk, regulatory uncertainty, and macroeconomic volatility; the 4.4x multiple may reflect appropriate Brazil-specific risk premiums rather than a valuation error.
Earnings estimates are trending downward, which in conjunction with a 3-of-4 beat streak creates a conflicted picture where the company beats lowered expectations but fundamental expectations are declining.
→StableBear case
- Expectation
- Earnings estimates stabilize or turn upward within 2 quarters, with the company beating the stabilized consensus by at least 5% in the next 3 of 4 reported quarters.
CounterDownward earnings estimate revisions in fintech companies often precede a multi-quarter period of fundamental deterioration; the trend direction of estimates may be more predictive than the beat streak when the two conflict.
StoneCo is trading below all moving averages with a death cross in place, the 200-day average declining at 1.1% per month, MACD improving but still below zero, and on-balance volume falling — a combination that signals ongoing distribution.
→StableMomentum breakdown
- Expectation
- Price crosses above the 200-day moving average within 6 months and on-balance volume turns positive for at least 30 consecutive days, confirming accumulation has replaced distribution.
CounterDeath crosses in small-cap emerging market fintech stocks can persist for 12 to 18 months; the improving MACD is an early sign of recovery but is insufficient to confirm reversal without volume confirmation.
Analyst consensus price targets imply approximately 59% upside from the current price of $10.99, while short interest of 10% creates a potential short-squeeze dynamic if fundamentals improve and bearish positions are unwound.
→StableSentiment breakdown
- Expectation
- Short interest falls below 6% within 12 months as the upside case gains traction, and the stock reaches at least $14, more than 27% above current price.
CounterHigh short interest alongside downward earnings revisions may indicate that the bearish fundamental thesis is more current than the bullish analyst targets; shorts may be positioned on the most recent information.
TrendMatrix Research · core thesis
Engine thesis — one sentence
StoneCo trades at a forward price-to-earnings ratio of 4.4x with a PEG ratio of 0.02, earns a return on equity of 31%, and analysts carry a consensus target implying 59% upside, but the stock is in a confirmed price downtrend below all moving averages and earnings estimates are trending downward, creating a valuation opportunity with significant near-term execution risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 4.7 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.0 |
| FCF quality | 5.1 |
| Moat | 6.4 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 31%
- ▸Strong margins: 26%
- ▸Earnings quality warning: 66% FCF/NI
- ▸Rule of 40: 21 (fail)
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.6 |
| EPS growth | 10.0 |
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 7.2 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 5.9 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -2.6%/30d — confirmed downtrend
Sentiment
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.3 |
| Price target | 9.7 |
| erm sentiment | 4.0 |
- ▸Analyst upside: 56%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider buying — $115,553 (0.004% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.7 |
| quality rank | 8.4 |
| growth rank | 1.4 |
- ▸Attractive P/E vs peers
- ▸Best-in-class margins
Technical
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.9 |
| support resistance | 5.8 |
| 52w position | 3.3 |
Risk (lower is worse)
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.0 |
| days to cover | 7.9 |
| volatility | 2.4 |
| put call | 5.9 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 4.7 |
| debt equity | 4.3 |
- ▸High IV: 205%
- ▸Above max pain $0
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 5.8 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (8)
- MOMENTUM:4.9>=4.5
- ASYMMETRY:5.0>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:39d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
5.04
Upside
+40.8%
Downside
8.1%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 42
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.60>1.3, MCap $2.7B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:4.9>=4.5. Top dim: Value at 9.8; weakest: Risk (lower is worse) at 4.2. No conviction either direction.
The strongest dimensions are Value at 9.8, Sentiment at 7.2, and Quality at 7.1; the weakest are Risk (lower is worse) at 4.2, Technical at 4.3, and Peer rank at 4.9. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 5.04 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional Valuation 4x Pe Roe 31pct
Trip ifForward price-to-earnings multiple falls below 3x as earnings consensus is revised down by more than 25% from current levels.
- P2Earnings Estimates Trending Down
Trip ifEarnings estimate consensus falls below $1.80 per share for the next reported fiscal year, declining more than 19% from the current implied level of approximately $2.22.
- P3Confirmed Death Cross Momentum Failure
Trip ifStock price drops below $9, more than 18% below the current $10.99, while the 200-day moving average slope accelerates beyond -2% per month.
- P4Analyst 59pct Upside High Short Interest
Trip ifShort interest rises above 14%, more than 40% above the current 10%, indicating institutional bearish positioning is intensifying as the recovery thesis is challenged.