Why StoneCo Stock Surged This Week
StoneCo (NASDAQ: STNE) stock rose higher this week thanks to better-than-expected quarterly results. The Brazil-based fintech company's share price gained 14.2% across the week's trading, according to data from S&P Global Market Intelligence.
After the market closed on Tuesday, StoneCo published its fourth-quarter results, beating Wall Street's expectations for sales and earnings. The business posted sales of 3.61 billion Brazilian real (roughly $636 million), beating the average analyst estimate's call for sales of 3.58 billion real (roughly $631 million). Non-GAAP (adjusted) earnings per share came in at $0.40, beating the average analyst target by $0.06 per share.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
StoneCo stock jumped on Q4 beats
StoneCo's revenue increased roughly 11% year over year in the fourth quarter, and adjusted earnings per share increased roughly 47%. Continued customer additions and an increase in average revenue per user in the financial services unit powered sales growth in the period. Total payment volumes for small and medium-sized business customers using the company's platform rose 22% compared to the prior-year period. The business also continued to rapidly scale its credit business back up in the quarter.
What's next for StoneCo?
Despite the rally this week, StoneCo stock is still down roughly 34% over the last year. The company's share price has been pressured by macroeconomic conditions in Brazil and some growth deceleration. But the outlook could be becoming more favorable for the fintech services provider.
Inflation has started to cool off in Brazil, which could pave the way for StoneCo to deliver improved business results and stock performance. Macroeconomic dynamics still present significant risk factors for StoneCo, but the stock looks cheaply valued, trading at roughly 8 times this year's expected earnings.
Should you invest $1,000 in StoneCo right now?
Before you buy stock in StoneCo, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and StoneCo wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $721,394!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of March 18, 2025
Keith Noonan has positions in StoneCo. The Motley Fool has positions in and recommends StoneCo. The Motley Fool has a disclosure policy.
Related Articles
Trump's Nuclear Interest in Ukraine: Which Stocks Stand to Gain?
TradingKey - The Trump administration is seeking to establish new agreements with Ukraine regarding critical minerals and energy assets, expanding economic demands on Kyiv to facilitate a peace deal with Russia.
[IN-DEPTH ANALYSIS] MicroStrategy (MSTR): The Core Strategy You Should Know about When Investing in Bitcoin
Currently, the premium of the stock price over the Bitcoin value is relatively low. If the Bitcoin price rises, the stock price may rebound by 30% and rise above $400 per share.
[IN-DEPTH ANALYSIS] CrowdStrike (CRWD): The Train is Missed, Waiting for Another Dip
Unfortunately, after the post-outage rally, the share price of CrowdStrike already seems well-priced, even if we price a rather optimistic growth trajectory and margin expansion for the coming five years.
[IN-DEPTH ANALYSIS] Affirm: Will the End of Partnership with Walmart Impact Its Fundamentals?
With a 27% profit margin, $22.6B liquidity, and expected profitability by Q4 2025, Affirm is solid, though Walmart’s exit and competition impact its target price at $43/share.
Broadcom’s AI Boom Reshapes the Industry
TradingKey - Broadcom Inc. (AVGO) has become a leader in semiconductor and infrastructure software through AI-driven expansion and acquisitions. On the basis of rising revenues tied to AI, healthy margins, and aggressive cash generation, Broadcom presents a compelling investment case to investors.