Bull of the Day: StoneCO (STNE)

StoneCo Company OverviewZacks Rank #1 (Strong Buy) stock StoneCo (STNE) is a leading fintech company based in Brazil. The company runs a complete end-to-end cloud-based platform that allows retailers and businesses to accept electronic payments across storefronts and mobile and online channels. Investors can breakdown StoneCo’s business into three primary segments, including:1.       Payment Processing: STNE is the leading provider of point-of-sale payment processing services. Like Block (XYZ) (formerly Square) in the United States, STNE’s technology empowers businesses to accept credit cards, debit cards, and digital wallet payments through its point-of-sale payment solution.2.       Banking Services: StoneCo is much more than a payment processor. Small and medium-sized businesses can use STNE to bank, pay bills, and manage accounts. In addition, because STNE collects transaction data, the company can utilize that data to assess a client’s creditworthiness and offer loans.3.       Software Tools: Like Canadian e-commerce leader Shopify (SHOP), STNE offers a full suite of products that allow businesses to seamlessly conduct e-commerce transactions, analyze their client base, and manage customers.StoneCo: Tapping into Brazil’s Digital Payment GrowthStone allows investors to harness the growth of a largely untapped and rapidly growing Brazilian payments market. Brazil is the world’s ninth-largest economy and boasts the largest economy in Latin America, with more than $2 trillion in annual GDP. In Brazil, retail sales are growing, the middle class encompasses roughly 60% of the population, and the country is modernizing into a digital economy. Unlike the United States, Brazil’s digital payment economy is unsaturated, with roughly only 15% of consumers using digital payments currently. However, Statista predicts that, from 2025 to 2029, the Brazilian digital payment market will register a ~29% compound annual growth rate (CAGR) and grow from ~$300 billion to ~$900 billion.STNE: A Consistent EPS WinnerStoneCO has consistently delivered EPS results above Wall Street expectations. The company has outpaced Zacks Consensus Estimates in twelve of the past thirteen quarters. Last quarter, despite a difficult and uncertain macroeconomic environment, STNE beat Wall Street’s top-and-bottom-line expectations. A positive EPS surprise of 21.88% last quarter suggests that STNE’s business is gaining momentum.Image Source: Zacks Investment ResearchStoneCo Offers Growth at a Reasonable PriceDespite a more than 15% earnings surge, STNE shares are cheap and trade at a forward P/E ratio of ~8x EPS.Image Source: Zacks Investment ResearchBullish Trend Change STNE’s technical picture echoes its bullish fundamentals. Following last quarter’s earnings results, shares bolted above the 200-day moving average and are breaking out of a multi-week base structure.Image Source: TradingViewBottom LineStoneCo’s comprehensive fintech platform, consistent earnings outperformance, and attractive valuation allow investors to profit from Brazil’s digital payment transformation.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Shopify Inc. (SHOP): Free Stock Analysis Report StoneCo Ltd. (STNE): Free Stock Analysis Report Block, Inc. (XYZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks