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StoneCo Ltd. (STNE) Dips More Than Broader Markets: What You Should Know

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StoneCo Ltd. (STNE - Free Report) closed at $13.63 in the latest trading session, marking a -1.02% move from the prior day. This change lagged the S&P 500's daily loss of 0.7%. Meanwhile, the Dow lost 0.54%, and the Nasdaq, a tech-heavy index, lost 1.17%.

Coming into today, shares of the company had gained 20.9% in the past month. In that same time, the Computer and Technology sector gained 1.4%, while the S&P 500 gained 2.35%.

Wall Street will be looking for positivity from StoneCo Ltd. as it approaches its next earnings report date. This is expected to be August 16, 2023. In that report, analysts expect StoneCo Ltd. to post earnings of $0.17 per share. This would mark year-over-year growth of 240%. Our most recent consensus estimate is calling for quarterly revenue of $402.15 million, down 14.38% from the year-ago period.

STNE's full-year Zacks Consensus Estimates are calling for earnings of $0.71 per share and revenue of $1.94 billion. These results would represent year-over-year changes of +115.15% and +4.41%, respectively.

Any recent changes to analyst estimates for StoneCo Ltd. should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.41% higher within the past month. StoneCo Ltd. is currently sporting a Zacks Rank of #2 (Buy).

In terms of valuation, StoneCo Ltd. is currently trading at a Forward P/E ratio of 19.39. This represents a discount compared to its industry's average Forward P/E of 38.97.

Also, we should mention that STNE has a PEG ratio of 0.35. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Software was holding an average PEG ratio of 1.62 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 86, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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