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STNE Stock Rises 108% Year to Date: Still a Buy or Time to Wait?
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Key Takeaways
STNE stock has jumped 108.7% YTD, outperforming peers like PAGS and DLO by a wide margin.
StoneCo's MSMB client base, PIX volumes and retail deposits all posted solid Q1 growth.
STNE trades at 10.67X forward P/E, well below its three-year high and industry average of 40.58X.
StoneCo Ltd. (STNE - Free Report) shares have surged 108.7%, significantly outperforming the Internet–Software industry and the S&P 500, which rose around 16.2% and 5.2%, respectively. This impressive rally also puts StoneCo ahead of major fintech rivals like PagSeguro Digital (PAGS - Free Report) and DLocal Limited (DLO - Free Report) .
PagSeguro Digital, which focuses on providing digital payment solutions to small and mid-sized enterprises, climbed 49.4%, while DLocal Limited, a cross-border payments provider, posted a modest gain of just 1.1%. Both PagSeguro and DLocal lagged behind StoneCo’s remarkable run.
As investors wonder whether this rally has more room to run, a closer look at StoneCo’s business fundamentals, strategic tailwinds and valuation makes a compelling case that this stock remains a buy.
Image Source: Zacks Investment Research
What's Driving STNE Stock?
StoneCo, a leading provider of financial technology solutions in Brazil, is strategically positioned to benefit from the booming global fintech industry. According to the Fortune Business Insights report, the global fintech market, valued at $340.1 billion in 2024, is projected to surge past $1.12 trillion by 2032, reflecting a robust CAGR of 16.2%. StoneCo, with its cloud-based payment processing, banking and credit solutions, is aligned with the promising trends in the sector.
Rising demand for real-time payments and secure digital transactions, particularly in emerging markets, has further reinforced StoneCo’s strategic foothold within Latin America’s rapidly transforming digital financial landscape.
Fintech Ecosystem Gaining Depth: StoneCo continues to deepen its presence in Brazil’s underpenetrated MSMB (micro, small, and medium business) market through an integrated financial ecosystem. In the first quarter of 2025, active clients in the payments business reached 4.3 million, up 17% year over year. MSMB total payment volume (TPV) also grew 17%, while PIX payment volumes exploded by 95%, driving deposits and monetization potential.
In tandem, the company’s banking operations showed strong momentum. Total retail deposits reached R$8.3 billion, up 38% year over year. R$6.3 billion was placed in time deposits as part of StoneCo’s “cash sweep” strategy — contributing to the diversification of its funding sources.
Credit Portfolio Scaling With Discipline: StoneCo’s total credit portfolio reached R$1.4 billion at the end of the first quarter, driven primarily by working capital loans and merchant credit cards. While the portfolio continues to grow, the company is maintaining underwriting discipline. Non-performing loans (NPLs) over 90 days stood at a controlled 4.57%, and provisions remain stable at 12% of the portfolio. StoneCo is shifting to a "cost of risk" view, which came in at 10% in the first quarter of 2025, reflecting a mature approach as the portfolio scales and cohorts age.
Software Growth Adds Strategic Edge: Beyond financial services, StoneCo’s Software segment is becoming an important margin lever. Revenues grew 11% year over year in the first quarter of 2025, while adjusted EBITDA rose 12%. The company’s software CapEx, as a percentage of EBITDA, improved to 51%, down from 71% in the prior-year quarter, indicating stronger cash conversion and efficiency gains.
STNE is also witnessing stronger adoption of its financial services offerings, with 38% of its clients now classified as heavy users — those utilizing multiple solutions — by the end of the first quarter, pointing to rising product penetration and monetization.
Shareholder-Friendly Capital Allocation: Another bright spot is management’s prudent approach to capital returns. After identifying R$3 billion in excess capital at the end of 2024, the company executed R$843 million in share buybacks during the first quarter of 2025. This lifted total repurchases over the past 12 months to R$2.4 billion, translating into a robust 12% distribution yield. Management also announced a new R$2 billion share repurchase program, signaling continued confidence in the stock’s intrinsic value. With an adjusted net cash position of R$3.8 billion, StoneCo remains well-capitalized to support growth while rewarding shareholders.
STNE Trading Cheap
Despite its stellar run, STNE remains attractively priced. STNE stock has a Value Score of B. This is evident, as in terms of forward 12-month P/E, StoneCo shares currently trade at 10.67X, well off its three-year high of 32.69X and below its median of 13.43X. The stock is also trading significantly below the industry’s P/E ratio of 40.58. The stock is also trading below DLocal’s 16.54X. Meanwhile, PagSeguro Digital trades at 7.35X.
Image Source: Zacks Investment Research
Here’s Why STNE Looks Like a Buy Right Now
With momentum firmly on its side, STNE offers a blend of growth, profitability and undervaluation. The company's effective repricing strategy, solid deposit monetization, disciplined capital return and efficient operating model all support continued earnings growth. Its underappreciated valuation, particularly in relation to its performance and peers, adds a strong margin of safety. As fintech adoption accelerates across Latin America, StoneCo’s integrated solutions, expanding ecosystem and capital discipline make it well-poised for long-term growth.
With a Zacks Rank #2 (Buy), it still seems to be an opportune time for investors to capitalize on StoneCo’s momentum before the market fully prices in its upside potential, even after a 108% YTD rally. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
STNE: Broker Rating
StoneCo currently has an average brokerage recommendation (ABR) of 1.67 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by nine brokerage firms. Image Source: Zacks Investment Research
Of the nine recommendations deriving the current ABR, seven are Strong Buy, representing 77.78% of all recommendations.
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STNE Stock Rises 108% Year to Date: Still a Buy or Time to Wait?
Key Takeaways
StoneCo Ltd. (STNE - Free Report) shares have surged 108.7%, significantly outperforming the Internet–Software industry and the S&P 500, which rose around 16.2% and 5.2%, respectively. This impressive rally also puts StoneCo ahead of major fintech rivals like PagSeguro Digital (PAGS - Free Report) and DLocal Limited (DLO - Free Report) .
PagSeguro Digital, which focuses on providing digital payment solutions to small and mid-sized enterprises, climbed 49.4%, while DLocal Limited, a cross-border payments provider, posted a modest gain of just 1.1%. Both PagSeguro and DLocal lagged behind StoneCo’s remarkable run.
As investors wonder whether this rally has more room to run, a closer look at StoneCo’s business fundamentals, strategic tailwinds and valuation makes a compelling case that this stock remains a buy.
Image Source: Zacks Investment Research
What's Driving STNE Stock?
StoneCo, a leading provider of financial technology solutions in Brazil, is strategically positioned to benefit from the booming global fintech industry. According to the Fortune Business Insights report, the global fintech market, valued at $340.1 billion in 2024, is projected to surge past $1.12 trillion by 2032, reflecting a robust CAGR of 16.2%. StoneCo, with its cloud-based payment processing, banking and credit solutions, is aligned with the promising trends in the sector.
Rising demand for real-time payments and secure digital transactions, particularly in emerging markets, has further reinforced StoneCo’s strategic foothold within Latin America’s rapidly transforming digital financial landscape.
Fintech Ecosystem Gaining Depth: StoneCo continues to deepen its presence in Brazil’s underpenetrated MSMB (micro, small, and medium business) market through an integrated financial ecosystem. In the first quarter of 2025, active clients in the payments business reached 4.3 million, up 17% year over year. MSMB total payment volume (TPV) also grew 17%, while PIX payment volumes exploded by 95%, driving deposits and monetization potential.
In tandem, the company’s banking operations showed strong momentum. Total retail deposits reached R$8.3 billion, up 38% year over year. R$6.3 billion was placed in time deposits as part of StoneCo’s “cash sweep” strategy — contributing to the diversification of its funding sources.
Credit Portfolio Scaling With Discipline: StoneCo’s total credit portfolio reached R$1.4 billion at the end of the first quarter, driven primarily by working capital loans and merchant credit cards. While the portfolio continues to grow, the company is maintaining underwriting discipline. Non-performing loans (NPLs) over 90 days stood at a controlled 4.57%, and provisions remain stable at 12% of the portfolio. StoneCo is shifting to a "cost of risk" view, which came in at 10% in the first quarter of 2025, reflecting a mature approach as the portfolio scales and cohorts age.
Software Growth Adds Strategic Edge: Beyond financial services, StoneCo’s Software segment is becoming an important margin lever. Revenues grew 11% year over year in the first quarter of 2025, while adjusted EBITDA rose 12%. The company’s software CapEx, as a percentage of EBITDA, improved to 51%, down from 71% in the prior-year quarter, indicating stronger cash conversion and efficiency gains.
STNE is also witnessing stronger adoption of its financial services offerings, with 38% of its clients now classified as heavy users — those utilizing multiple solutions — by the end of the first quarter, pointing to rising product penetration and monetization.
Shareholder-Friendly Capital Allocation: Another bright spot is management’s prudent approach to capital returns. After identifying R$3 billion in excess capital at the end of 2024, the company executed R$843 million in share buybacks during the first quarter of 2025. This lifted total repurchases over the past 12 months to R$2.4 billion, translating into a robust 12% distribution yield. Management also announced a new R$2 billion share repurchase program, signaling continued confidence in the stock’s intrinsic value. With an adjusted net cash position of R$3.8 billion, StoneCo remains well-capitalized to support growth while rewarding shareholders.
STNE Trading Cheap
Despite its stellar run, STNE remains attractively priced. STNE stock has a Value Score of B. This is evident, as in terms of forward 12-month P/E, StoneCo shares currently trade at 10.67X, well off its three-year high of 32.69X and below its median of 13.43X. The stock is also trading significantly below the industry’s P/E ratio of 40.58. The stock is also trading below DLocal’s 16.54X. Meanwhile, PagSeguro Digital trades at 7.35X.
Image Source: Zacks Investment Research
Here’s Why STNE Looks Like a Buy Right Now
With momentum firmly on its side, STNE offers a blend of growth, profitability and undervaluation. The company's effective repricing strategy, solid deposit monetization, disciplined capital return and efficient operating model all support continued earnings growth. Its underappreciated valuation, particularly in relation to its performance and peers, adds a strong margin of safety. As fintech adoption accelerates across Latin America, StoneCo’s integrated solutions, expanding ecosystem and capital discipline make it well-poised for long-term growth.
With a Zacks Rank #2 (Buy), it still seems to be an opportune time for investors to capitalize on StoneCo’s momentum before the market fully prices in its upside potential, even after a 108% YTD rally. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
STNE: Broker Rating
StoneCo currently has an average brokerage recommendation (ABR) of 1.67 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by nine brokerage firms.
Image Source: Zacks Investment Research
Of the nine recommendations deriving the current ABR, seven are Strong Buy, representing 77.78% of all recommendations.