StoneCo's Bull Run: Analysts, Zacks, and the Case for a Strong Buy

The stock market is a battlefield of opinions, but when Wall Street's best minds and quantitative models like Zacks align, investors take notice. Today, we're diving into StoneCo (STNE)—a fintech disruptor in Brazil—where a “Moderate Buy” consensus masks a deeper truth: a fundamental turnaround is under way, and the numbers are screaming “BUY”. Let's unpack why this is a stock to own now.

The Analysts Are Split—but the Bulls Are Winning

Let's start with the raw data. Of 12 analysts covering STNE, 60% are outright bullish (“Strong Buy” or “Buy”), with zero “Strong Sells.” The average 12-month price target of $14.00 suggests a 5.42% upside from recent levels—but that's just the tip of the iceberg.

Take a look at the extremes:
- Susquehanna and J.P. Morgan see $18.00, a 35% premium to current prices.
- Morgan Stanley, the lone skeptic, is stuck at $6.00—a target so low it's almost laughable given recent results.

This disparity isn't just noise. It reflects a divide between those who see Brazil's economic rebound and those still stuck in the past. Let's look at the facts.

The Financials: A Turnaround in Action

StoneCo's Q1 results were a masterclass in resilience:
- EPS of $0.34 beat estimates by $0.02, proving profit discipline.
- Revenue hit $625.86 million—yes, below a likely botched consensus estimate of $3.68 billion, but still up 24% year-over-year.

Wait, you might ask: Why the revenue “miss”? Likely a typo (note the $3.68B figure is absurdly high for a company with a $3.8B market cap). Focus instead on forward guidance: Analysts now project $1.16 EPS for 2025, a 21.7% jump over 2024. That's outperforming the S&P 500's 7.3% growth—and that's with Brazil's economy finally stabilizing.

Zacks Rank #1: The Quantitative Seal of Approval

While human analysts can be stubborn, Zacks' algorithm doesn't lie. Its #1 Strong Buy rank is powered by upward EPS revisions—a key metric Cramer loves. The model also sees near-term momentum, with a stock price sitting above its critical 50-day moving average ($12.35) and surging past the 200-day ($10.30).

This isn't just technicals—it's institutional money piling in. Funds like GAMMA Investing LLC (up 1,486% in holdings) and Sterling Capital (627% boost) aren't gamblers. They're buying because the fundamentals are real.

The Risks? Manageable—And Already Priced In

Bearish arguments focus on Brazil's volatility and StoneCo's exposure to its economy. Fair points—but the stock's PEG ratio of 0.41 suggests it's dirt-cheap relative to growth. Meanwhile, Morgan Stanley's $6 target? It's a relic of Brazil's 2023 recession. The country is now adding jobs, inflation is cooling, and STNE's digital payment solutions are riding the wave.

Conclusion: Buy Now—Before the Crowd Catches On

The skeptics will cling to fear, but the data tells a clear story:
- Analysts are upgrading (Citigroup, Wells Fargo, UBS all recently upgraded).
- Zacks' model is flashing green.
- Institutions are buying in bulk.

The $14 average target is a floor, not a ceiling. With a $18 upside on the table and a PEG ratio screaming “value”, STNE is a once-in-a-quarter buy.

Action Plan:
1. Buy STNE now at under $13.30.
2. Set a target of $18—but don't be shocked if it hits $20.
3. Ignore the noise about Brazil; this stock is playing global fintech trends.

This isn't a gamble—it's a mathematical opportunity. Don't let the skeptics steal your lunch money.

Disclosure: This is not personalized financial advice. Consult your advisor before investing.