StoneCo Stock Rides on Product Innovation, Attractive Valuation

StoneCo Ltd. STNE is benefiting from relentless product innovation, which is expanding its digital ecosystem and enabling it to better serve micro, small, and medium-sized businesses (MSMBs) in Brazil. These innovations include the Pix QR Code solution, which allows instant peer-to-merchant (P2M) payments integrated with Point of Sale (“POS”) systems for simplified reconciliation; TapTon, which enables mobile payment acceptance through Android and iOS devices; Payment Link for generating personalized payment URLs; and Web Checkout (through Pagar.me platform), which streamlines the online shopping experience for better conversion.StoneCo also offers a POS Gateway for in-store payments, a Payment Service Provider platform for marketplaces and omni-channel players (through Pagar.me platform), and Split Payments (Split de Pagamento) to divide a single transaction among multiple recipients. Merchants can also leverage prepayment solutions to accelerate access to receivables. StoneCo’s software portfolio is positioned to capitalize on Brazil’s rapid shift toward digital payments by seamlessly integrating with its expanding payment ecosystem. Fueled by strong tailwinds, such as a pix transaction volume growing 95% year over year and a 10% rise in card transactions in first-quarter 2025, StoneCo’s cloud-based POS and ERP platforms — Linx, Trinks, Sponte and others — are becoming essential infrastructure for merchants moving away from cash. The company’s full-stack platform and regional focus position it to ride on long-term structural tailwinds in financial inclusion and SME digitization.StoneCo’s CompetitorsMercadoLibre, Inc. MELI, through its Mercado Pago, offers a comprehensive suite of digital payment solutions that play a critical role in expanding financial inclusion across Latin America. Its offerings include a digital wallet that supports peer-to-peer transfers, bill payments and QR code-based transactions. For merchants, Mercado Pago provides mobile point-of-sale (MPOS) devices that simplify in-store digital payments. The company is also testing in-chat payments via WhatsApp and enabling Pix-based cross-border payments for Brazilian tourists in Argentina. These innovations position Mercado Pago as a leader in digital finance in Latin America.NU Holdings Ltd. NU, primarily through its digital banking brand Nubank, offers a wide range of digital payment products designed to simplify financial transactions and promote accessibility across Latin America. Its flagship payment solution, NuPay, enables secure, one-click checkouts directly within the Nubank app, eliminating the need for card details. Nubank also provides a digital account, NuConta, which supports PIX transfers, bill payments, ATM withdrawals, mobile top-ups and virtual debit cards. Additionally, Nubank offers NuTap, a mobile POS solution for small businesses to accept card payments. STNE’s Stock Price PerformanceYear to date, shares of StoneCo have gained 87.6% compared with the industry’s growth of 14.2%. The S&P 500 composite also grew 3% in the same period.Image Source: Zacks Investment ResearchStoneCo’s ValuationSTNE’s valuation looks attractive. The stock trades at a forward 12-month price-to-earnings (P/E) of 9.78X, lower than the industry average of 40.16X. It carries a Value Score of B.Image Source: Zacks Investment ResearchSTNE Consensus Estimate TrendThe Zacks Consensus Estimate for STNE’s earnings has moved south over the past 60 days.Image Source: Zacks Investment ResearchSTNE stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks' Research Chief Picks Stock Most Likely to "At Least Double"Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.See Our Top Stock to Double (Plus 4 Runners Up) >>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 Nu Holdings Ltd. (NU): Free Stock Analysis Report MercadoLibre, Inc. (MELI): Free Stock Analysis Report StoneCo Ltd. (STNE): 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