Key Stats for StoneCo Stock
- Past-Week Performance: +0.8%
- 52-Week Range: $9.8 to $20
- Current Price: $14.1
What Happened?
StoneCo (STNE), Brazil’s payments and banking platform for small and mid-sized merchants, is distributing approximately BRL 5.0 billion (approximately $967 million, derived at BRL 5.1712 per dollar) to shareholders in 2026 while guiding adjusted EPS 17% to 24% higher, even as its stock trades at $14.12, well below its 52-week high of $19.95.
On March 2, StoneCo reported Q4 2025 adjusted basic earnings per share of BRL 2.87, up 26.8% y/y, and announced a CEO transition as CFO Mateus Scherer Schwening replaced Pedro Zinner, who moved to Non-Executive Chairman after overseeing a 34% full-year earnings per share gain and the BRL 3.1 billion (approximately $599 million, derived) Linx software unit sale to TOTVS.
The credit portfolio, StoneCo’s working capital and lending business for merchants, reached BRL 2.8 billion (approximately $541 million, derived) in Q4, up 134.9% y/y and 23.0% sequentially, while banking active clients grew 21% y/y to 3.7 million and retail deposits rose 27% y/y to BRL 11.1 billion (approximately $2.1 billion, derived), making credit and banking increasingly meaningful revenue contributors alongside payments.
On the Q4 2025 earnings call, incoming CEO Mateus Scherer Schwening stated, “our priorities are clear: continued earnings expansion, a credit business that scales on our terms and capital returned to shareholders, including the extraordinary Linx distribution,” directly tying the BRL 3.1 billion (approximately $599 million, derived) in Linx proceeds received February 27 to a Board-level distribution decision expected in April.
Separately, last March 11, StoneCo cut approximately 370 jobs, about 3% of total staff, triggering a labor court rehiring order on March 12 and a joint 20-working-day suspension request filed by StoneCo and the Sindpd-SP union to allow negotiations.
StoneCo’s 2026 adjusted earnings per share guidance of BRL 10.8 to BRL 11.4 (approximately $2.09 to $2.20, per Reuters), supported by a BRL 2.0 billion (approximately $387 million, derived) buyback program already in motion and a BRL 3.1 billion extraordinary distribution pending an April Board meeting, sets up a capital return story with a specific near-term trigger, while the April 23 annual general meeting adds a second confirmed catalyst on the same timeline.
Wall Street’s Take on STNE Stock
The BRL 5.0 billion (approximately $967 million, derived) capital return program announced March 2, combining BRL 2.0 billion (approximately $387 million, derived) in operational buybacks and BRL 3.1 billion (approximately $599 million, derived) in Linx sale proceeds, directly shrinks the share count and mechanically lifts forward earnings per share beyond what operating growth alone delivers.
As TIKR estimates, StoneCo’s normalized earnings per share reaches BRL 10.80 (approximately $2.09, derived) for 2026 and BRL 12.62 (approximately $2.44, derived) for 2027, growth of 13.2% and 16.9% respectively, driven by the credit portfolio’s 134.9% y/y expansion and banking deposits growing 27% y/y to BRL 11.1 billion (approximately $2.1 billion, derived).
Sixteen analysts currently cover STNE, with 10 buys, 2 outperforms, 3 holds, and 1 sell, reflecting broad conviction that the Linx divestment and EPS re-rating represent the clearest near-term revaluation catalyst on the Brazilian fintech board.
The spread between the Street’s low target of BRL 47.19 and high of BRL 121.56 maps directly to execution risk: the low reflects credit NPL deterioration and TPV stagnation, while the high assumes banking and credit cross-sell accelerates as repositioning spend converts into deposit and loan growth.
What Does the Valuation Model Say?
TIKR’s mid-case model prices STNE at $20.66, a 46.3% total return over 4.7 years at an 8.3% IRR, assuming mid-single-digit revenue growth and a net income margin of 16.2%, both grounded in the company’s Q4 2025 gross margin of 44.6% and expanding credit yield of 3.1%.
STNE trades at roughly 6.8x TIKR’s 2026 normalized earnings per share estimate of BRL 10.80 (approximately $2.09, derived), well below the stock’s own elevated historical multiples during its 2021 growth phase, and that discount persists despite 13.2% EPS growth and a BRL 5.0 billion (approximately $967 million, derived) capital return program actively in motion.
The TIKR model’s $20.66 price target rests on the credit portfolio compounding from BRL 2.8 billion (approximately $541 million, derived) toward its longer-term potential, supported by a banking active client base already at 3.7 million and deposit penetration over MSMB payment volume expanding from 6.8% to 8.2% in a single year.
Management’s April Board meeting to define the BRL 3.1 billion (approximately $599 million, derived) Linx distribution mechanism signals that the capital return story has a specific, imminent trigger rather than an open-ended timeline, separating this from a typical buyback narrative.
The single risk that breaks the model is NPL deterioration in the specialized credit desk, where concentration in higher-ticket SMB loans already pushed NPL 15 to 90 days to 4.43% in Q4 2025.
The April 23 annual general meeting and the April Board announcement on Linx distribution mechanics are the two near-term events to watch, with the share repurchase vs. dividend decision determining the direct EPS upside beyond the current BRL 10.80 (approximately $2.09, derived) estimate.
Should You Invest in StoneCo Ltd.?
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