StoneCo (STNE) Shares Plunge 2.6% Intraday as Revenue Misses and Strategic Uncertainties Spur Selloff

StoneCo (STNE) shares fell 2.60% intraday on September 8, 2025, reaching their lowest level since September 2025, with a 0.23% decline in the session. The selloff reflects mounting concerns over the company’s financial trajectory despite recent earnings surprises and strategic adjustments. Analysts and institutional investors have shown mixed signals, underscoring the stock’s vulnerability to shifting market dynamics.

StoneCo’s August 7 earnings report highlighted a $0.39 EPS beat, outperforming estimates by $0.03, though revenue of $643.82 million lagged far below the $3.78 billion forecast. The company raised 2025 guidance, projecting 14.5% gross profit growth and 32% EPS growth, signaling optimism about operational efficiency. However, a negative P/E ratio of -22.06 and a -8.37% net margin remain red flags, complicating assessments of its near-term profitability.

Institutional confidence has grown, with 73.19% of shares held by institutions. PenderFund Capital and Crestline Management significantly increased holdings in recent quarters, suggesting long-term conviction in StoneCo’s potential to capitalize on Brazil’s digital commerce expansion. Analysts have upgraded the stock to “Moderate Buy,” with UBS raising its price target to $20.00 and Zacks assigning a “strong-buy” rating. These moves align with the company’s 0.41 PEG ratio, which implies undervaluation relative to earnings growth.

Short interest in StoneCo declined 11.71% month-on-month, with 7.52% of shares shorted and a 3.3 days-to-cover ratio. This reduction, coupled with a positive news sentiment score of 1.37, indicates improving investor sentiment. The stock ranks 276th out of 665 technology companies on MarketBeat, reflecting its competitive positioning despite high volatility (beta of 1.91). Strategic initiatives, including a $200 million share repurchase and expanded Stone Hubs, aim to solidify its foothold in Brazil’s $1.2 trillion digital payments sector.

Challenges persist, including Brazil’s regulatory uncertainties and StoneCo’s unprofitable operations. While the company’s 18.71% ROE and 1.48 current ratio suggest manageable liquidity, its debt-to-equity ratio of 0.76 and negative net margin deter risk-averse investors. Analysts project a 42.9% discount to fair value, but execution risks remain critical. For now, StoneCo’s stock remains a high-volatility bet, balancing growth potential with operational headwinds.