Is StoneCo’s 139% Rally in 2025 Backed by Fundamental Value?

Key Points

  • Strong Performance: StoneCo has shown impressive gains with a 139.4% year-to-date increase, a 3.9% rise in the last week, and a 3.6% increase over the past month, despite a 63.4% drop over five years.**
  • Undervaluation Indicators: Valuation analyses, including Excess Returns and Price-to-Sales (P/S) ratios, suggest StoneCo is undervalued, with intrinsic value estimated at 53.2% above current share price and a P/S Fair Ratio of 3.08x compared to its current 2.02x.**
  • Fintech Growth Opportunities: Recent regulatory clarity and trends in Brazil’s digital payments landscape, alongside StoneCo’s focus on small business ecosystems, are driving renewed investor optimism.**
  • Robust Financial Metrics: StoneCo’s Return on Equity (ROE) stands at 23.78%, with a Book Value of $43.24 per share and projected stable earnings per share (EPS) of $11.82, indicating strong profitability.**
  • Narrative Tool: Simply Wall St’s Narratives feature allows investors to create personalized valuation stories for StoneCo, linking future expectations to financial forecasts with community fair value estimates ranging from $14.37 to $19.97 per share.**

Summary

StoneCo, a Brazilian fintech company, has captured investor attention with a remarkable 139.4% year-to-date stock gain, alongside recent weekly and monthly increases of 3.9% and 3.6%, respectively, despite a 63.4% decline over five years. The article by Simply Wall St highlights a compelling turnaround story fueled by Brazil’s evolving digital payments landscape and regulatory clarity, which, combined with StoneCo’s focus on small business ecosystems, has shifted investor sentiment toward optimism. Valuation analyses underscore the stock’s potential, with an Excess Returns model indicating a 53.2% undervaluation and a Price-to-Sales (P/S) Fair Ratio of 3.08x against a current 2.02x, suggesting a discount to its fundamental value. Financial metrics are strong, with a 23.78% Return on Equity and a projected earnings per share of $11.82. Additionally, the Narratives tool on Simply Wall St allows investors to craft personalized valuation stories, with community fair value estimates for StoneCo ranging from $14.37 to $19.97 per share. While the stock appears undervalued across multiple metrics, the article emphasizes a long-term, data-driven perspective and notes it is not financial advice, encouraging investors to consider their own objectives and the latest company developments.

yahoo
October 28, 2025
Crypto
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