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StoneCo Ltd. (STNE) Gains As Market Dips: What You Should Know

Zacks Equity Research

StoneCo Ltd. (STNE) closed the most recent trading day at $27.37, moving +1.03% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.16%. Meanwhile, the Dow gained 0.01%, and the Nasdaq, a tech-heavy index, lost 0.26%.

Coming into today, shares of the company had lost 27.72% in the past month. In that same time, the Computer and Technology sector lost 0.03%, while the S&P 500 lost 0.19%.

STNE will be looking to display strength as it nears its next earnings release, which is expected to be May 13, 2019.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.83 per share and revenue of $490.60 million, which would represent changes of +112.82% and +18.29%, respectively, from the prior year.

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Any recent changes to analyst estimates for STNE should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. STNE is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note STNE's current valuation metrics, including its Forward P/E ratio of 32.51. This valuation marks a discount compared to its industry's average Forward P/E of 52.58.

Investors should also note that STNE has a PEG ratio of 0.59 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 3.32 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 73, which puts it in the top 29% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow STNE in the coming trading sessions, be sure to utilize Zacks.com.


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Zacks Investment Research