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StoneCo Ltd. (STNE) Ascends While Market Falls: Some Facts to Note

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In the latest trading session, StoneCo Ltd. (STNE - Free Report) closed at $10.12, marking a +0.3% move from the previous day. The stock outpaced the S&P 500's daily loss of 0.85%. Meanwhile, the Dow lost 0.75%, and the Nasdaq, a tech-heavy index, lost 0.96%.

The company's shares have seen a decrease of 6.14% over the last month, not keeping up with the Computer and Technology sector's loss of 2.07% and the S&P 500's loss of 3.02%.

The investment community will be closely monitoring the performance of StoneCo Ltd. in its forthcoming earnings report. The company is scheduled to release its earnings on November 10, 2023. The company's earnings per share (EPS) are projected to be $0.23, reflecting a 130% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $405.25 million, indicating a 15.38% decline compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $0.79 per share and a revenue of $1.98 billion, representing changes of +139.39% and +6.55%, respectively, from the prior year.

Any recent changes to analyst estimates for StoneCo Ltd. should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 3.29% upward. As of now, StoneCo Ltd. holds a Zacks Rank of #2 (Buy).

Digging into valuation, StoneCo Ltd. currently has a Forward P/E ratio of 12.85. This expresses a discount compared to the average Forward P/E of 37.04 of its industry.

Meanwhile, STNE's PEG ratio is currently 0.23. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As the market closed yesterday, the Internet - Software industry was having an average PEG ratio of 1.47.

The Internet - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 72, finds itself in the top 29% echelons of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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