StoneCo Ltd. provides financial technology and software solutions that help merchants and integrated partners conduct electronic commerce across in-store, online, and mobile channels in Brazil. Its financial services include payments, prepayment, digital banking, and credit solutions. Payment offerings cover electronic payments and alternative methods such as payment slips and Pix transactions, along with digital products like split-payment processing, multi-payment processing, recurring payments for subscriptions, and a tap-on-phone solution. The company serves online, offline, and omni-channel sales clients under the Stone, tonstone, and paggar.me brands. StoneCo Ltd. was founded in 2012 and is based in George Town, the Cayman Islands.
StoneCo's Credit Boom Comes With Costly Loan Book Cracks
StoneCo reported a second-quarter credit boom that doubled its loan portfolio to BRL 3.8 billion year over year, but the expansion is straining its loan book as Brazilian interest rates stay high. Credit revenues jumped 153% to BRL 348.5 million, while non-performing loans over 90 days nearly doubled to 8.60% from 4.67%, and cost of risk rose to 21.5% from 20.2%. The company also began disbursing government-backed loans totaling BRL 334.2 million, which carry lower risk and pricing. Management flagged a BRL 11 million default from a long-standing client that filed for bankruptcy protection, and CFO Diego Salgado estimated that higher Selic rates near 14% versus the planned 12.5% add more than BRL 300 million of pressure on 2026 results. Adjusted net income fell 2.6% to BRL 582.7 million, but adjusted basic EPS rose 8.6% to BRL 2.40 thanks to BRL 3.0 billion in buybacks over the past year. StoneCo maintains its full-year adjusted gross profit guidance of BRL 6.6 billion to BRL 7.0 billion, though it expects results near the lower end.
STNE · Capital · Negative Q2 credit boom strained the loan book: NPLs over 90 days nearly doubled to 8.60%, cost of risk rose to 21.5%, a BRL 11M client default, and higher Selic adds BRL 300M+ pressure on 2026 results, with adjusted net income down 2.6%.
Applied Materials, Nektar Therapeutics, and StoneCo reported quarterly results, with Applied Materials posting adjusted earnings of $3.5 per share on revenues of $9.12 billion, beating the Zacks Consensus Estimate of $3.38 per share. Nektar Therapeutics reported a narrower-than-expected adjusted loss of $1.23 per share on revenues of $10.13 million, while StoneCo posted adjusted earnings of $0.47 per share on revenues of $709.88 million. The reports come as Wall Street heads for a winning week in which the S&P 500 recorded a new all-time high, and the Commerce Department said retail sales decreased 0.6% in July. After the closing bell, the University of Michigan will report its preliminary August consumer sentiment index, and the Census Bureau will release June business inventories data.
StoneCo downgraded to Neutral at BofA Securities on challenging Brazil outlook
BofA Securities downgraded StoneCo to Neutral from Buy and cut its price target to $13.00 from $23.00, citing a challenging operating environment in Brazil for 2026 and 2027. Analyst Mario Pierry lowered 2026 and 2027 earnings estimates by 9% and 13%, respectively, to reflect elevated funding costs and higher provision charges for credit losses. The firm noted that higher-for-longer interest rates will increase financial expenses because funding costs in the prepayment business are directly linked to the Selic rate. Headwinds are expected across both businesses: total payment volume growth should remain constrained by weak economic activity and elevated client churn, while higher rates should slow loan growth and lead to a higher cost of risk from asset quality deterioration. Shares were 0.27% lower at $11.27 during afternoon trading on Wednesday.
Zacks Highlights Four Value Stocks Amid Middle East Tensions
Zacks.com featured Nexa Resources, StoneCo, General Motors, and Invesco as value stocks with low price-to-cash-flow ratios amid renewed Middle East tensions that rattled markets. The S&P 500 fell 0.79% to 7,515.34, the Nasdaq dropped 1.55% to 25,873.18, and the Dow slipped 0.26% to 52,498.64 on Monday after President Donald Trump reinstated a U.S. blockade on Iranian shipping through the Strait of Hormuz. Nexa Resources carries a Zacks Rank #2 and a Value Score of A, with shares soaring 173.9% over the past year. StoneCo also holds a Zacks Rank #2 and a Value Score of A, though its shares have fallen 25% over the past year. General Motors has a Zacks Rank #2 and a Value Score of A, with shares rallying 45.5% over the past year. Invesco rounds out the list with a Zacks Rank #2 and a Value Score of A, and its shares have surged 69.6% over the past year.
StoneCo to release second quarter 2026 results on August 13th
StoneCo Ltd. will release its second quarter 2026 financial results on Thursday, August 13th, 2026, after the market closes. The company will host a conference call the same day at 5:00pm ET to discuss the results, accessible via Zoom webinar or phone. StoneCo also announced its quiet period will begin on July 27th, 2026.
StoneCo Ltd. Stock Rises 1.38% While Broader Market Slips
StoneCo Ltd. closed at $10.99, up 1.38%, outperforming the S&P 500 which fell 0.22%. The company is expected to report earnings per share of $0.47, a 20.51% increase from the same quarter last year, on revenue of $731.18 million, up 8.8%. For the full year, analysts project earnings of $2.31 per share and revenue of $2.91 billion, representing gains of 42.59% and 10.25% respectively. StoneCo holds a Zacks Rank of #2 (Buy) and trades at a forward P/E of 4.69, a discount to its industry's 19.05.
Five9 and StoneCo Appear Undervalued Based on Key Metrics
Five9 and StoneCo are showing signs of being undervalued according to several valuation metrics. Five9 holds a Zacks Rank #1 (Strong Buy) and a Value grade of A, with a forward P/E of 8.65 compared to its industry average of 25.50. Its PEG ratio is 0.65 versus the industry's 0.91, and its P/B ratio is 2.85 against an industry average of 4.39. StoneCo, rated Zacks Rank #2 (Buy) with a Value Score of A, trades at a forward P/E of 11.19 and a PEG of 0.37, while its industry averages are 25.50 and 0.91 respectively. Both companies also exhibit attractive P/S and P/CF ratios relative to their industry peers, reinforcing the view that they may be undervalued at current levels.
Zacks Highlights Four Value Stocks With Low Price-to-Cash-Flow Ratios
Zacks Investment Research identified four value stocks with low price-to-cash-flow ratios as lower energy costs strengthen the market outlook. The stocks are Nexa Resources, Avnet, StoneCo, and USANA Health Sciences, all carrying a Zacks Rank of 1 or 2 and a Value Score of A or B. Nexa Resources, a polymetallic producer, has a Zacks Rank of 1 and a Value Score of A, with shares up 158.1% over the past year. Avnet, a technology distributor, holds a Zacks Rank of 2 and a Value Score of B, with shares surging 67.4% over the past year. StoneCo, a financial technology provider, and USANA Health Sciences, a nutritional supplement maker, both carry a Zacks Rank of 2 and a Value Score of A, though their shares have declined 27.7% and 35.5% respectively over the past year.
STNE · Capital · Neutral Named as a value stock with low price-to-cash-flow ratio and Zacks Rank 2/Value Score A; no company-specific development beyond the valuation screen mention.
StoneCo Ltd. Stock Rises 1.51% While S&P 500 Declines
StoneCo Ltd. shares closed at $10.75, a 1.51% gain, outperforming the S&P 500 which fell 0.37%. The stock has declined 3.73% over the past month, lagging the Computer and Technology sector's 4.52% gain. Analysts expect the company to report earnings per share of $0.47, up 20.51% year-over-year, on revenue of $731.18 million, an 8.8% increase. Full-year estimates call for earnings of $2.31 per share and revenue of $2.91 billion, representing year-over-year growth of 42.59% and 10.25% respectively. StoneCo Ltd. currently holds a Zacks Rank of 2, or Buy, and trades at a forward price-to-earnings ratio of 4.58, a discount to its industry average of 18.33.
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