StoneCo (STNE): Revisiting Valuation After Fresh Coverage Highlights Its Role in Brazil’s Digital Payments Shift

Fresh coverage has put StoneCo (STNE) back on investors radar, spotlighting its value credentials and expanding role in Brazil’s digital payments ecosystem at a time when the stock has pulled back in the past month.

See our latest analysis for StoneCo.

That pullback sits against a powerful backdrop, with the share price still showing a strong year to date share price return and a robust one year total shareholder return that signals momentum cooling, not collapsing, after a big run.

If StoneCo’s rebound has you thinking more broadly about digital finance, it might be a good moment to explore other high growth tech and AI stocks that are reshaping how money moves.

With valuation metrics flashing a value signal and analysts still seeing meaningful upside to today’s price, the key question now is whether StoneCo remains genuinely undervalued or if the market is already pricing in its next leg of growth.

Most Popular Narrative Narrative: 23.4% Undervalued

With StoneCo last closing at $15.73 against a narrative fair value near $20.54, the current pricing gap puts future earnings power in sharp focus.

Cross-selling of end-to-end financial solutions (payments, digital banking, working capital credit) is increasing client engagement and wallet share, demonstrated by growing deposit balances (+36% year-over-year) and credit portfolio expansion (+25% sequentially), supporting higher recurring revenue and long-term net earnings improvement.

Read the complete narrative.

Curious how a still unprofitable fintech earns such a premium valuation? The narrative focuses on accelerating earnings, fatter margins, and a surprisingly lean future multiple. Want to see the full blueprint behind that gap?

Result: Fair Value of $20.54 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained credit losses or slower payment volume growth could quickly challenge expectations for margin expansion, buybacks, and StoneCo’s long term earnings trajectory.

Find out about the key risks to this StoneCo narrative.

Build Your Own StoneCo Narrative

If this view does not completely align with yours, or you would rather dig into the numbers firsthand, you can build a custom story in minutes using Do it your way.

A great starting point for your StoneCo research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Ready for more investment ideas?

Before you move on, explore your next potential move by using our screener to uncover fresh opportunities that match your strategy and risk profile.

• Explore possible rebounds by targeting beaten down opportunities using these 908 undervalued stocks based on cash flows that still have compelling fundamentals and long term potential.
• Position yourself at the frontier of innovation by reviewing these 26 AI penny stocks where rapid adoption and scalable platforms could influence future earnings.
• Strengthen your income stream by focusing on reliable payers through these 15 dividend stocks with yields > 3% that can help balance growth ambitions with steady cash flows.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com