StoneCo Ltd. (STNE) reported its second-quarter 2024 earnings, falling short of analysts’ expectations. The company earned $0.30 per share, missing the Zacks Consensus Estimate of $0.34 per share. This result represents an earnings surprise of -11.76%. While StoneCo exceeded revenue expectations, reaching $615.13 million for the quarter, the missed earnings target has triggered a negative outlook for the company’s stock.
Despite surpassing revenue estimates in three of the last four quarters, StoneCo’s stock performance has been lackluster. Shares have declined by approximately 26.8% since the beginning of the year, contrasting with the S&P 500’s gain of 13.9%.
The current trend in earnings estimate revisions, which are considered a reliable indicator of near-term stock movements, is unfavorable for StoneCo. This unfavorable trend has prompted a downgrade to a Zacks Rank #4 (Sell), indicating an expected underperformance of the stock in the coming period.
While StoneCo exceeded revenue estimates for the quarter, the company’s earnings outlook remains a concern. Investors should closely monitor upcoming earnings estimates and revisions, which could provide further insights into the company’s future performance.
It is important to consider the broader industry landscape when analyzing StoneCo’s stock. The Zacks Industry Rank for Internet – Software, where StoneCo operates, is currently in the top 38% of over 250 industries. This ranking suggests a positive outlook for the industry overall, potentially offsetting some of the concerns surrounding StoneCo’s individual performance.
Investors are advised to stay informed about the company’s upcoming earnings reports and any changes in the earnings outlook. The current consensus EPS estimate stands at $0.33 for the next quarter, with revenues projected at $616.32 million. For the current fiscal year, the consensus EPS estimate is $1.46, with revenues anticipated at $2.44 billion.
