StoneCo (NASDAQ:STNE) Trading 6.7% Higher - Should You Buy?

Key Points

• StoneCo shares rose 6.7% to about $10.31, although trading volume was 81% below the stock’s average daily volume.
• Analysts remain cautious, with an average rating of “Hold” and a $14.30 price target; recent firms including Citigroup and Bank of America downgraded the stock to neutral.
• The company slightly beat quarterly EPS estimates, reporting $0.47 versus $0.46 expected, while institutional investors own a substantial 73.19% of outstanding shares.

StoneCo Ltd. (NASDAQ:STNE - Get Free Report) shares shot up 6.7% on Wednesday . The stock traded as high as $10.27 and last traded at $10.3070. 1,025,759 shares were traded during trading, a decline of 81% from the average daily volume of 5,337,819 shares. The stock had previously closed at $9.66.

Wall Street Analysts Forecast Growth

Several equities analysts recently issued reports on STNE shares. Jefferies Financial Group initiated coverage on shares of StoneCo in a report on Thursday, July 23rd. They issued a "hold" rating and a $12.60 target price on the stock. Citigroup lowered StoneCo from a "buy" rating to a "neutral" rating and lowered their price objective for the stock from $18.00 to $11.00 in a research report on Friday, May 15th. JPMorgan Chase & Co. dropped their price objective on StoneCo from $20.00 to $16.50 and set an "overweight" rating on the stock in a research note on Wednesday, May 27th. Weiss Ratings cut StoneCo from a "hold (c)" rating to a "hold (c-)" rating in a research note on Thursday, June 18th. Finally, Bank of America downgraded StoneCo from a "buy" rating to a "neutral" rating and set a $13.00 target price for the company. in a report on Wednesday, July 15th. Four research analysts have rated the stock with a Buy rating and six have assigned a Hold rating to the stock. According to data from MarketBeat.com, the company currently has an average rating of "Hold" and an average target price of $14.30.

StoneCo Stock Performance

The company has a debt-to-equity ratio of 0.84, a quick ratio of 1.26 and a current ratio of 1.26. The stock has a market cap of $2.55 billion, a P/E ratio of 4.14, a price-to-earnings-growth ratio of 0.28 and a beta of 1.74. The company's 50 day moving average price is $10.58 and its 200-day moving average price is $12.21.

StoneCo (NASDAQ:STNE - Get Free Report) last released its quarterly earnings results on Thursday, August 13th. The company reported $0.47 earnings per share for the quarter, beating analysts' consensus estimates of $0.46 by $0.01. The company had revenue of $129.73 million for the quarter, compared to analyst estimates of $708.24 million. StoneCo had a net margin of 22.92% and a return on equity of 22.19%. Equities analysts forecast that StoneCo Ltd. will post 2.3 EPS for the current fiscal year.

Insider Activity

In other news, Director Silvio Jose Morais sold 9,000 shares of the company's stock in a transaction that occurred on Friday, June 12th. The stock was sold at an average price of $11.29, for a total value of $101,610.00. Following the completion of the transaction, the director directly owned 21,000 shares of the company's stock, valued at $237,090. This represents a 30.00% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available at this hyperlink.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently bought and sold shares of the business. BRC Global BAH Investments Ltd. purchased a new stake in shares of StoneCo during the 4th quarter valued at $84,501,000. Squadra Investments Gestao DE Recursos LTDA. grew its position in StoneCo by 435.5% during the first quarter. Squadra Investments Gestao DE Recursos LTDA. now owns 6,662,253 shares of the company's stock valued at $94,071,000 after buying an additional 5,418,053 shares during the period. SPX Gestao de Recursos Ltda increased its holdings in StoneCo by 1,054.8% during the fourth quarter. SPX Gestao de Recursos Ltda now owns 5,236,620 shares of the company's stock worth $77,450,000 after buying an additional 4,783,158 shares during the last quarter. Bank of America Corp DE increased its holdings in StoneCo by 151.7% during the first quarter. Bank of America Corp DE now owns 6,032,572 shares of the company's stock worth $85,180,000 after buying an additional 3,636,276 shares during the last quarter. Finally, Qube Research & Technologies Ltd bought a new stake in StoneCo in the third quarter worth about $58,017,000. Hedge funds and other institutional investors own 73.19% of the company's stock.

StoneCo Company Profile

StoneCo Ltd., commonly known as Stone, is a Brazilian financial technology company that provides integrated digital payment solutions and related financial services to merchants. Through its cloud-based platform, Stone enables businesses of all sizes to accept a variety of payment methods, including point-of-sale (POS) terminals, mobile card readers and e-commerce gateways. In addition to payment acceptance, the company offers value-added services such as working capital loans, digital banking products and automated billing tools designed to help merchants manage cash flow and streamline operations.

Since its founding in 2012 by André Street and Eduardo Pontes, Stone has focused on serving over half a million merchants across Brazil's retail, restaurant and services sectors.

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