StoneCo Ltd. Class A Common Shares (STNE)

FairStock Score: 82/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn high returns on capital, generate cash, and sell at a sensible price. StoneCo is a Brazilian fintech and software provider to merchants, and the raw numbers are striking. At the close on 2026-10-13, the shares were $11.81, giving a FairStock-calculated P/E of 4.46, P/B of 1.55, and a Graham Number of $48.23, a 75.51% margin of safety. FairStock also calculates ROE of 33.97%, FCF yield of 99.8%, and EV/EBITDA of 1.97. Those are the kind of figures that make a value investor's ears perk up. But Graham taught me to demand a margin of safety for a reason. The balance sheet is levered: debt-to-equity is 1.88, the FairStock Altman Z-Score is 0.50, and the Piotroski F-Score is only 4/9. ROCE is 6.86%, much lower than ROE, suggesting leverage is flattering returns. The company operates in Brazil, a market with real macroeconomic and currency risks. In fiscal Q2 2026, it had revenue of $3.3B and net income of $449.9M, a 13.48% margin. The provided growth numbers show revenue growth of 6.46% but profit growth of 231.71%, which is impressive but may not be repeatable. FairStock cannot assign a Peter Lynch category because there are only 0 years of filed results, needing 3, so history is thin. The price looks cheap, but the business quality is not clearly proven through a full cycle. I would want to see debt come down, cash flow remain real, and returns on capital improve before trusting the low multiple. Cheap can be a trap when leverage and volatility are high.

In plain English: StoneCo provides payment and software tools to merchants in Brazil, helping them handle in-store, online, and mobile commerce. The business shows very high profit growth and very cheap-looking numbers, but it also carries a lot of debt and has a short history of filed results. At the recent price, the shares look inexpensive against the company's profits and net assets, but the risks mean the cheapness may not be a free lunch.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer