StoneCo (NASDAQ:STNE) Shares Gap Down on Disappointing Earnings

Key Points

• StoneCo shares fell after disappointing results: Quarterly EPS was $0.45, below the $0.48 consensus estimate, and the stock opened at $7.32 versus its prior close of $7.72.
• Quarterly revenue was reported at $126.71 million, versus analysts’ $715.99 million expectation. StoneCo issued FY2026 EPS guidance of $2.101–$2.218.
• Analyst sentiment is mostly cautious: Goldman Sachs and UBS cut price targets, and UBS downgraded the stock to neutral. MarketBeat reported an average rating of “Hold” and an average target price of $12.30.

StoneCo Ltd. (NASDAQ:STNE - Get Free Report)'s stock price gapped down prior to trading on Friday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $7.72, but opened at $7.32. StoneCo shares last traded at $7.5550, with a volume of 1,857,251 shares traded.

The company reported $0.45 EPS for the quarter, missing the consensus estimate of $0.48 by ($0.03). StoneCo had a return on equity of 22.19% and a net margin of 22.92%. The business had revenue of $126.71 million for the quarter, compared to analysts' expectations of $715.99 million. StoneCo has set its FY 2026 guidance at 2.101-2.218 EPS.

Analysts Set New Price Targets

STNE has been the subject of several research analyst reports. The Goldman Sachs Group dropped their target price on shares of StoneCo from $11.00 to $9.50 and set a "neutral" rating for the company in a research report on Friday, October 30th. Weiss Ratings lowered shares of StoneCo from a "hold (c)" rating to a "hold (c-)" rating in a report on Tuesday, November 3rd. UBS Group lowered shares of StoneCo from a "buy" rating to a "neutral" rating and decreased their price target for the stock from $15.00 to $8.50 in a report on Thursday, November 5th. Finally, Jefferies Financial Group assumed coverage on shares of StoneCo in a research report on Thursday, July 23rd. They set a "hold" rating and a $12.60 price objective on the stock. Two analysts have rated the stock with a Buy rating and eight have assigned a Hold rating to the company. According to data from MarketBeat, the stock presently has an average rating of "Hold" and an average target price of $12.30.

Insider Buying and Selling at StoneCo

In other news, Director Silvio Morais sold 21,000 shares of the stock in a transaction that occurred on Wednesday, September 2nd. The stock was sold at an average price of $9.91, for a total transaction of $208,110.00. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Company insiders own 11.25% of the company's stock.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the company. EverSource Wealth Advisors LLC raised its holdings in StoneCo by 77.4% during the 1st quarter. EverSource Wealth Advisors LLC now owns 2,705 shares of the company's stock valued at $38,000 after buying an additional 1,180 shares during the last quarter. Versant Capital Management Inc grew its holdings in StoneCo by 54.4% in the 2nd quarter. Versant Capital Management Inc now owns 3,032 shares of the company's stock worth $33,000 after acquiring an additional 1,068 shares during the last quarter. SBI Securities Co. Ltd. increased its position in shares of StoneCo by 19.5% in the third quarter. SBI Securities Co. Ltd. now owns 6,109 shares of the company's stock valued at $57,000 after acquiring an additional 995 shares during the period. GAMMA Investing LLC increased its position in shares of StoneCo by 63.1% in the third quarter. GAMMA Investing LLC now owns 6,339 shares of the company's stock valued at $59,000 after acquiring an additional 2,452 shares during the period. Finally, Corient Private Wealth LP purchased a new position in shares of StoneCo in the second quarter valued at about $120,000. 73.19% of the stock is owned by hedge funds and other institutional investors.

StoneCo Trading Down 1.9%

The stock has a market capitalization of $1.89 billion, a P/E ratio of 3.05, a P/E/G ratio of 0.22 and a beta of 1.76. The firm's 50 day moving average price is $9.75 and its 200 day moving average price is $11.86. The company has a debt-to-equity ratio of 0.84, a current ratio of 1.26 and a quick ratio of 1.26.

StoneCo Company Profile

StoneCo Ltd. is a Brazilian financial technology company that provides payment processing and business management solutions, primarily to merchants in Brazil. Its services are designed to help businesses accept and manage payments across in-person and online channels. The company's offerings include payment terminals, digital payment tools, financial services and software for managing business operations. Through brands such as Stone, Pagar.me and Linx, StoneCo serves businesses ranging from smaller merchants to larger retailers.

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