Core Points - StoneCo Ltd. will announce its fourth quarter and fiscal year 2024 financial results on March 18th, 2025, after market close [1] - A conference call to discuss the results will take place on the same day at 5:00 PM ET [1] - The company will enter a Quiet Period starting February 28th, 2025, in relation to its financial results [3] Company Overview - Stone is a leading provider of financial technology and software solutions that enable merchants to conduct commerce seamlessly across multiple channels and support their business growth [4]

Core Viewpoint - The recommendation for StoneCo (NASDAQ: STNE) has been raised from hold to buy, indicating a positive outlook based on recent developments and market conditions [1]. Group 1: Company Analysis - The analyst has over 5 years of experience in equity analysis specifically in Latin America, which adds credibility to the insights provided [1]. - There are several signs indicating that an investment opportunity is emerging for StoneCo, suggesting a shift in market sentiment [1].

Core Viewpoint - StoneCo Ltd. is experiencing a decline in stock price and earnings projections, indicating potential challenges ahead for the company Group 1: Stock Performance - StoneCo Ltd. shares closed at $9.22, reflecting a -1.28% change from the previous day, underperforming the S&P 500 which gained 0.36% [1] - Over the past month, StoneCo Ltd. shares have increased by 17.19%, outperforming the Computer and Technology sector which saw no change and the S&P 500's gain of 2.11% [1] Group 2: Earnings Projections - StoneCo Ltd. is expected to report earnings of $0.32 per share, representing an 11.11% decline year-over-year [2] - Revenue is projected to be $581.37 million, indicating an 11.36% decrease compared to the same quarter of the previous year [2] Group 3: Analyst Estimates - Recent changes to analyst estimates for StoneCo Ltd. suggest a focus on short-term business trends, with positive revisions seen as a favorable sign for the company's outlook [3] Group 4: Zacks Rank and Valuation - StoneCo Ltd. currently holds a Zacks Rank of 4 (Sell), with the consensus EPS projection moving 3.89% lower in the past 30 days [5] - The company is trading at a Forward P/E ratio of 8.1, significantly lower than the industry's average Forward P/E of 31.23, and has a PEG ratio of 0.37 compared to the industry's average of 2.34 [6] Group 5: Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 73, placing it in the top 30% of over 250 industries [7]

Company Performance - StoneCo Ltd. closed at $8.84, reflecting a -0.79% change from the previous trading day's closing, underperforming the S&P 500's daily gain of 0.92% [1] - Over the past month, shares of StoneCo Ltd. gained 13.07%, outperforming the Computer and Technology sector, which saw a loss of 2.99%, and the S&P 500's gain of 0.81% [2] Earnings Expectations - The upcoming earnings report for StoneCo Ltd. is anticipated to show an EPS of $0.32, which is an 11.11% decrease from the same quarter last year [3] - Revenue is expected to be $585.02 million, down 10.8% from the prior-year quarter [3] Analyst Estimates and Rankings - Recent changes to analyst estimates for StoneCo Ltd. indicate a shifting business landscape, with positive revisions reflecting optimism about the company's profitability [4] - The Zacks Rank system currently rates StoneCo Ltd. as 4 (Sell), with a 3.89% decline in the Zacks Consensus EPS estimate over the past month [6] Valuation Metrics - StoneCo Ltd. is trading at a Forward P/E ratio of 7.73, significantly lower than the industry average of 31.2, indicating a discount relative to its peers [7] - The company has a PEG ratio of 0.36, compared to the Internet - Software industry's average PEG ratio of 2.19, suggesting favorable growth expectations relative to its valuation [8] Industry Context - The Internet - Software industry, part of the Computer and Technology sector, holds a Zacks Industry Rank of 44, placing it in the top 18% of over 250 industries [9]

Group 1: Company Performance - StoneCo Ltd. ended the latest trading session at $8.58, reflecting a +1.66% adjustment from the previous day's close, outperforming the S&P 500's gain of 0.61% [1] - The company's shares gained 4.46% over the previous month, surpassing the Computer and Technology sector's gain of 1.24% and the S&P 500's gain of 2.08% [1] Group 2: Upcoming Financial Results - StoneCo Ltd.'s upcoming EPS is projected at $0.32, indicating an 11.11% decline compared to the same quarter of the previous year [2] - The Zacks Consensus Estimate for revenue is projecting net sales of $585.02 million, down 10.8% from the year-ago period [2] Group 3: Analyst Forecasts and Rankings - Recent revisions to analyst forecasts for StoneCo Ltd. are important as they reflect short-term business trends, with upward revisions indicating analysts' positivity towards the company's operations [3] - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), currently ranks StoneCo Ltd. at 4 (Sell), with a 12.41% fall in the Zacks Consensus EPS estimate over the past month [5] Group 4: Valuation Metrics - StoneCo Ltd. is trading with a Forward P/E ratio of 7.32, which is a discount compared to the industry's average Forward P/E of 29.01 [6] - The company has a PEG ratio of 0.34, significantly lower than the average PEG ratio of 2.19 for Internet - Software stocks [6] Group 5: Industry Context - The Internet - Software industry, which includes StoneCo Ltd., has a Zacks Industry Rank of 41, placing it in the top 17% of over 250 industries [7] - The Zacks Industry Rank measures the strength of industry groups, indicating that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Company Analysis - StoneCo Ltd (NASDAQ: STNE) was initiated with a "Buy" rating in August 2023, with a forward P/E ratio of 26x, indicating a solid foundation for future stock growth [1] Industry Insights - Beyond the Wall Investing provides access to high-quality analysis of Wall Street buying and selling ideas, offering a free trial and a 10% discount for new subscribers [1] - The platform is managed by Daniel Sereda, a chief investment analyst with expertise in filtering critical investment ideas from vast data, catering to institutional market participants [1]

Company Overview - StoneCo (NASDAQ: STNE) is facing challenges due to Brazil's macroeconomic environment, but the company has implemented multiple initiatives to maintain operational excellence [1] - The company has an improved financial profile and is starting to return value to shareholders [1] Analyst Perspective - The analysis is based on fundamental bottom-up analysis and quantitative modeling, with a focus on identifying perception gaps to capitalize on over-pessimism and excessive exuberance [1] - The objective is to identify asymmetric opportunities for investment [1]

Company Performance - StoneCo (NASDAQ: STNE) delivered strong Q3 numbers in November last year [2] - Despite strong Q3 performance, the stock plummeted 30% since the earnings release [2] - The stock has accumulated more than 50% devaluation over the last twelve months [2] Analyst Background - The author is a researcher and operations manager at DM Martins Research [4] - The author has previously contributed to TheStreet and currently writes for platforms such as TipRanks and GuruFocus [4] - The author's goal at Seeking Alpha is to provide insightful analysis primarily on foreign equities, with a focus on emerging markets [4]

Stock Performance - StoneCo (STNE) shares declined 26.1% over the trailing three months, underperforming the Zacks Computer & Technology sector's return of 6.7% and the Zacks Internet - Software industry's appreciation of 6.5% [1] - STNE shares lagged peers like Fortinet (FTNT), Paylocity Holding (PCTY), and Smartsheet (SMAR), which appreciated 23.1%, 16.9%, and 1.1%, respectively, over the same period [1] Financial Performance - The Zacks Consensus Estimate for STNE's Q4 2024 revenues is $585.02 billion, indicating a year-over-year decline of 10.80% [4] - The consensus mark for Q4 2024 earnings is 33 cents per share, down 3 cents in the past 30 days, indicating a year-over-year decline of 8.33% [4] - The Zacks Consensus Estimate for STNE's 2024 revenues is $2.29 billion, suggesting a year-over-year decline of 5.27% [4] - The consensus mark for 2024 earnings is $1.17 per share, down 5 cents over the past 30 days, but indicating year-over-year growth of 20.62% [5] - StoneCo has a mixed earnings surprise history, missing the Zacks Consensus Estimate in one of the trailing four quarters and beating the other three, resulting in an average surprise of 3.42% [5] Operational Challenges - StoneCo's underperformance is attributed to a decline in Total Payment Volume (TPV) within the key accounts segment, led by a loss of volume from a major sub-acquirer in Q3 2024 [2] - The Non-Performing Loans (NPL) rate for Merchant Solutions increased to 3.7% from 2.6% last quarter, indicating a higher risk of loss unless outstanding debts are recovered [3] - The key accounts segment experienced an 11.3% sequential decline in TPV [3] - Financial expenses are expected to rise in Q4 due to higher interest rates [10] Growth Prospects - StoneCo saw strong growth in TPV for its Micro, Small, and Medium Business (MSMB) clients, with a 20% year-over-year increase to BRL 114 billion in Q3 2024 [6] - MSMB TPV is projected to keep growing, driven by steady gains in Card TPV and a significant rise in PIX QR code volumes [6] - The MSMB segment reached a record take rate of 2.58% in Q3 2024, reflecting effective revenue generation driven by strong payment take rates and increased monetization in banking and credit services [7] - StoneCo reported 4 million active payment clients in the MSMB segment in Q3 2024, marking 21% year-over-year growth [8] - The company achieved remarkable growth in its banking services, with its client base expanding 47% year over year to reach 2.8 million customers [8] - Total deposits improved significantly to BRL 6.8 billion, while demand deposits rose 50% to BRL 6.7 billion [9] - StoneCo surpassed its annual guidance for credit, achieving a portfolio of BRL 923 million in Q3 2024, representing quarter-over-quarter growth of nearly 30% [9] Zacks Rank - STNE currently carries a Zacks Rank 4 (Sell) [11]

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?Let's take a look at what these Wall Street heavyweights have to say about StoneCo Ltd. (STNE) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.StoneCo currently has an average brokerage recommendation ( ...