STNE Should I Buy
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StoneCo Ltd is not a strong buy at the moment for a beginner investor with a long-term strategy. While the stock has some positive catalysts, such as the extraordinary dividend and potential for growth in the payments sector, the financial performance and recent analyst sentiment indicate caution. The lack of strong proprietary trading signals and mixed technical indicators further support a hold recommendation.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI is in the neutral zone at 75.241, and moving averages are converging, suggesting no clear trend. The stock is trading near resistance levels (R1: 15.133, R2: 15.566), which may limit immediate upside potential.
The company is expanding its Long Term Incentive Plan, which could align management's interests with shareholders. The stock has a 70% chance of gaining 5.77% over the next month based on historical patterns.
2025 adjusted gross profit fell below expectations, leading to a stock dip. Net income and EPS dropped significantly YoY in Q4 2025, signaling financial challenges. Analysts have been lowering price targets, and one firm downgraded the stock to Neutral.
In Q4 2025, revenue grew 3.21% YoY to $3.73 billion, but net income dropped 117.10% YoY to $499.96 million. EPS declined 118.34% YoY to 1.83, and gross margin slightly decreased to 75.53%. These figures indicate weakening profitability despite modest revenue growth.
Analysts have mixed views. JPMorgan recently lowered the price target to $20 while maintaining an Overweight rating. UBS and Goldman Sachs also lowered price targets but kept Buy ratings. Grupo Santander downgraded the stock to Neutral with a $21 price target. Analysts acknowledge StoneCo's leadership in small business payments but are cautious due to financial performance and market conditions.
