StoneCo Ltd. (STNE) closed the most recent trading day at $16.63, moving +1.96% from the previous trading session. The stock exceeded the S&P 500, which registered a gain of 0.61% for the day. Elsewhere, the Dow gained 0.49%, while the tech-heavy Nasdaq added 0.95%.
The company's stock has climbed by 17.59% in the past month, exceeding the Computer and Technology sector's gain of 5.6% and the S&P 500's gain of 3.85%.
Market participants will be closely following the financial results of StoneCo Ltd. in its upcoming release. The company's upcoming EPS is projected at $0.34, signifying a 13.33% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $671.49 million, up 9.16% from the year-ago period.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.44 per share and revenue of $2.73 billion, indicating changes of +6.67% and +10.94%, respectively, compared to the previous year.
Investors should also take note of any recent adjustments to analyst estimates for StoneCo Ltd. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 1.89% rise in the Zacks Consensus EPS estimate. StoneCo Ltd. is holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, StoneCo Ltd. is currently trading at a Forward P/E ratio of 11.33. This valuation marks a discount compared to its industry average Forward P/E of 28.96.
It is also worth noting that STNE currently has a PEG ratio of 0.45. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Software industry had an average PEG ratio of 2.22 as trading concluded yesterday.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 62, putting it in the top 26% of all 250+ industries.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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StoneCo Ltd. (STNE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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