Brazilian software company Totvs said on Thursday it has decided to withdraw from the competitive process to buy StoneCo's unit Linx, according to a securities filing.
I own StoneCo Ltd. for its undervaluation, improving technical trading pattern, and the potential for a stronger Brazilian real against the U.S. dollar in 2025. The stock trades at an ultra-low P/E of 8x, and EV to EBITDA ratio of 1.8x, making it a bargain choice in financial services. Technical momentum appears to have turned high over the past week, after many months of bearish action. Price could run higher over the next month or two.
George Town, Grand Cayman--(Newsfile Corp. - February 14, 2025) - StoneCo Ltd. (NASDAQ: STNE) (B3: STOC31) ("Stone") today announces that it will release its fourth quarter and fiscal year 2024 financial results on Tuesday, March 18th, 2025, after the market closes.
StoneCo Ltd. (STNE) concluded the recent trading session at $9.37, signifying a +1.52% move from its prior day's close.
Brazil's GDP growth and low unemployment are favorable for StoneCo, despite the country's controversial economic signs and high interest rates. StoneCo's recent financial results were strong, with high margins, good return on capital, and consistent earnings beats, enhancing investor confidence. The company's valuation is attractive, trading below peers, suggesting a potential 18% upside, with momentum in Brazilian assets as a key trigger. So, I am upgrading my recommendation.
StoneCo Ltd. (STNE) finished the last trading session at $9.22, which represents a decrease of 1.28% compared to the previous day's closing price.
StoneCo Ltd. (STNE) reachead $9.34 at the closing of the latest trading day, reflecting a -0.53% change compared to its last close.
StoneCo Ltd. (STNE) reachead $8.84 at the closing of the latest trading day, reflecting a -0.79% change compared to its last close.
StoneCo: A Rare Buying Opportunity (Rating Upgrade)
In 3Q24, STNE's revenue grew 6.91% y/y to R$3.36 billion, with significant increases in payment volume, digital banking deposits, and credit portfolio. Margins slightly deteriorated, with operating margin at 52.79% and EBITDA margin at 60.65%, but net margin expanded due to lower financial expenses. Although Brazil's economy will continue to weigh on the potential of STNE, the company has multiple initiatives to maintain its operational excellence and outperformance.