Entering text into the input field will update the search result below

StoneCo: Remaining Positive On Long-Term Growth Opportunities Despite Negative Sentiment

Jan. 05, 2022 3:11 AM ETStoneCo Ltd. (STNE)2 Comments


  • StoneCo has seen their stock pull back nearly 80% over the past year as investors have negative sentiment around high valuation and Brazilian economy risk.
  • Fundamentally, the company has seen a lot of success growing their SMB and micro-merchants in addition to growing their Banking and Insurance products.
  • Valuation remains attractive with the stock under $20, implying a valuation of just 20x a reasonable 2023 EPS estimate.

Young man shopping online

MStudioImages/E+ via Getty Images

StoneCo (NASDAQ:STNE) is one of the leading Brazilian financial technology companies, providing merchant and banking solutions. Over the past year, the stock has pulled back nearly 80% as the Brazilian economy has been in-and-out of pandemic-induced lockdowns. Nevertheless, STNE's fundamentals

Data by YCharts

Data by YCharts

I believe the biggest risk to STNE remains the Brazilian economy and potential future lockdowns driven by the global pandemic. If the country is not able to show continued improvement regarding vaccination and COVID case count, it could be a long, slow path towards recovery. In addition, there remains some risk with the Brazilian Real (the country's currency), which has shown to be quite volatile over time.

This article was written by

Individual investor with hands-on experience in the equity markets. Largely focusing on Tech companies or major mispricings in the market.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.