Is StoneCo (NasdaqGS:STNE) Attractive After Recent Volatility And Strong Excess Returns Signal

Simply Wall St.03-15 14:25

If you are trying to figure out whether StoneCo at around US$13.81 is a bargain or a trap, you are in the right place to focus on what the current price really reflects. The stock has had a mixed ride...

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The stock has had a mixed ride...</p>\n\n<a href=\"https://simplywall.st/stocks/us/diversified-financials/nasdaq-stne/stoneco/news/is-stoneco-nasdaqgsstne-attractive-after-recent-volatility-a\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Is StoneCo (NasdaqGS:STNE) Attractive After Recent Volatility And Strong Excess Returns Signal</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIs StoneCo (NasdaqGS:STNE) Attractive After Recent Volatility And Strong Excess Returns Signal\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-03-15 14:25 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/diversified-financials/nasdaq-stne/stoneco/news/is-stoneco-nasdaqgsstne-attractive-after-recent-volatility-a><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>If you are trying to figure out whether StoneCo at around US$13.81 is a bargain or a trap, you are in the right place to focus on what the current price really reflects. The stock has had a mixed ride...</p>\n\n<a href=\"https://simplywall.st/stocks/us/diversified-financials/nasdaq-stne/stoneco/news/is-stoneco-nasdaqgsstne-attractive-after-recent-volatility-a\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4227","symbol_name":"交易和支付处理服务","start_time":0,"source_url":"https://simplywall.st/stocks/us/diversified-financials/nasdaq-stne/stoneco/news/is-stoneco-nasdaqgsstne-attractive-after-recent-volatility-a","article_id":"2619170573","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/8032000-choice2-main-header/1585186601535"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/diversified-financials/nasdaq-stne/stoneco/news/is-stoneco-nasdaqgsstne-attractive-after-recent-volatility-a","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2619170573","pubTimestamp":1773555952,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"If you are trying to figure out whether StoneCo at around US$13.81 is a bargain or a trap, you are in the right place to focus on what the current price really reflects.\nThe stock has had a mixed ride, with a 0.7% return over the last 7 days, an 18.1% decline over 30 days, a 6.0% decline year to date, a 42.1% return over 1 year and 55.7% over 3 years, while still sitting 79.4% below its 5-year level.\nRecent headlines around StoneCo have largely centered on its role in Brazil's payments and...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4227":"交易和支付处理服务","BK4106":"数据处理与外包服务","BK4559":"巴菲特持仓","BK4566":"资本集团","STNE":"StoneCo","BK4535":"淡马锡持仓"},"translate_title":"在最近的波动和强劲的超额回报信号之后，StoneCo（纳斯达克GS：STNE）是否有吸引力","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"STNE":1.5},"content_text":"If you are trying to figure out whether StoneCo at around US$13.81 is a bargain or a trap, you are in the right place to focus on what the current price really reflects. The stock has had a mixed ride, with a 0.7% return over the last 7 days, an 18.1% decline over 30 days, a 6.0% decline year to date, a 42.1% return over 1 year and 55.7% over 3 years, while still sitting 79.4% below its 5-year level. Recent headlines around StoneCo have largely centered on its role in Brazil's payments and financial technology space, with investors reacting to shifts in sentiment on growth potential and risk appetite for the sector. This backdrop helps explain why the share price has seen sharp moves over both shorter and longer time frames, as the market reassesses what it is willing to pay for that exposure. On our valuation checks, StoneCo scores a 5 out of 6, which suggests the market price may not fully reflect some of the metrics we look at. Next, we will walk through the main valuation approaches behind that score, and then finish with a more holistic way to think about what the stock could be worth.  StoneCo delivered 42.1% returns over the last year. See how this stacks up to the rest of the Diversified Financial industry. AdvertisementApproach 1: StoneCo Excess Returns Analysis The Excess Returns model looks at how much value a company can create above the return that equity investors typically require. Instead of focusing on cash flows, it starts with what the business earns on its equity base and compares that to its cost of equity. For StoneCo, the model uses a Book Value of $44.17 per share and a Stable EPS of $12.30 per share, based on weighted future Return on Equity estimates from 7 analysts. This implies an Average Return on Equity of 24.37% on that equity base. The Cost of Equity is estimated at $3.70 per share, which means the Excess Return is $8.60 per share. In other words, the model assumes StoneCo can earn meaningfully more on its equity than the return investors require. It also uses a Stable Book Value of $50.48 per share, sourced from weighted future Book Value estimates from 5 analysts, to extend those excess returns into the future. Combining these inputs, the Excess Returns model arrives at an estimated intrinsic value of about $50.76 per share, which implies StoneCo is 72.8% undervalued relative to the recent share price of around $13.81. Result: UNDERVALUED Our Excess Returns analysis suggests StoneCo is undervalued by 72.8%. Track this in your watchlist or portfolio, or discover 48 more high quality undervalued stocks. STNE Discounted Cash Flow as at Mar 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for StoneCo. Approach 2: StoneCo Price vs Earnings For a company that is generating earnings, the P/E ratio is a straightforward way to see how much you are paying for each dollar of profit. It links the share price directly to the bottom line, which makes it easier to compare with alternatives. What counts as a “normal” or “fair” P/E depends on how the market views growth potential and risk. Higher expected growth or lower perceived risk can support a higher P/E, while lower growth or higher risk usually calls for a lower P/E. StoneCo currently trades on a P/E of 7.74x. That sits well below the diversified financial industry average of about 17.57x and the peer group average of 23.15x. Simply Wall St’s proprietary Fair Ratio for StoneCo is 17.03x, which is designed to be a more tailored benchmark. The Fair Ratio incorporates the company’s earnings growth profile, profit margins, risk characteristics, industry and market cap, rather than relying on broad peer or sector averages that may not share the same fundamentals. Comparing StoneCo’s current P/E of 7.74x with the Fair Ratio of 17.03x suggests the shares are trading below what this framework indicates could be a more typical multiple. Result: UNDERVALUED NasdaqGS:STNE P/E Ratio as at Mar 2026 P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 19 top founder-led companies. Upgrade Your Decision Making: Choose your StoneCo Narrative Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple tool on Simply Wall St’s Community page that lets you connect your view of StoneCo’s story to a set of revenue, earnings and margin assumptions. You can then turn those into a fair value and see in real time how different investors can look at the same company and reach very different conclusions, such as a more cautious view anchored around a Fair Value of about US$13.10 or a more optimistic view closer to US$25.38. You can then compare each Fair Value to today’s share price to decide whether the stock looks attractive, fully priced or expensive, while the Narrative itself keeps updating as new news, earnings and other data come through. For StoneCo, however, we will make it really easy for you with previews of two leading StoneCo Narratives: Both are built off the same set of underlying data, but they reach very different conclusions about what is already priced into the shares. Reading them side by side can help you decide which set of assumptions feels closer to your own view of the business, leadership changes and capital returns. 🐂 StoneCo Bull Case Fair value in this bullish narrative: US$25.38 per share Implied discount to this fair value at a US$13.81 share price: about 46% undervalued Revenue growth assumption in this view: about 9.65% a year  Focuses on StoneCo using its MSMB payments franchise, digital banking and a technology led model to grow its client base in a still underpenetrated Brazilian market. Assumes that regulatory support for open banking and fintech, together with access to low cost funding and excess capital, supports higher margins, strong earnings and material dividends and buybacks. Sees the planned 2026 CEO transition and broader leadership refresh as compatible with continued discipline on capital allocation and as a support for confidence in the equity story.  🐻 StoneCo Bear Case Fair value in this cautious narrative: US$13.10 per share Implied premium to this fair value at a US$13.81 share price: about 5% overvalued Revenue growth assumption in this view: about 10.14% a year  Highlights risks from central bank digital currencies, real time payment systems, regulation and heavy competition that could weigh on payment volumes, pricing power and margins. Flags StoneCo’s exposure to Brazilian small and medium businesses and the potential for higher credit losses and earnings volatility, especially around a CEO transition. Accepts that there is room for growth and capital returns, but questions whether the current share price leaves enough room for execution risk, leading to a lower fair value anchored close to the most bearish analyst targets.  Taken together, these two Narratives frame a realistic range for what StoneCo could be worth based on different, but still data driven, assumptions. Your next step is to decide which story you find more convincing, or to adjust the inputs yourself and build a version that matches your own expectations for growth, profitability, leadership and capital returns. Curious how numbers become stories that shape markets? Explore Community Narratives Do you think there's more to the story for StoneCo? Head over to our Community to see what others are saying! NasdaqGS:STNE 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    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\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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