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The most recent trading session ended with StoneCo Ltd. (STNE) standing at $8.84, reflecting a -0.79% shift from the previouse trading day's closing. The stock's performance was behind the S&P 500's daily gain of 0.92%. Meanwhile, the Dow experienced a rise of 0.31%, and the technology-dominated Nasdaq saw an increase of 2.03%.
Shares of the company witnessed a gain of 13.07% over the previous month, beating the performance of the Computer and Technology sector with its loss of 2.99% and the S&P 500's gain of 0.81%.
The investment community will be closely monitoring the performance of StoneCo Ltd. in its forthcoming earnings report. The company is expected to report EPS of $0.32, down 11.11% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $585.02 million, down 10.8% from the prior-year quarter.
Investors should also note any recent changes to analyst estimates for StoneCo Ltd. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, there's been a 3.89% fall in the Zacks Consensus EPS estimate. StoneCo Ltd. is currently a Zacks Rank #4 (Sell).
In terms of valuation, StoneCo Ltd. is currently trading at a Forward P/E ratio of 7.73. For comparison, its industry has an average Forward P/E of 31.2, which means StoneCo Ltd. is trading at a discount to the group.
We can additionally observe that STNE currently boasts a PEG ratio of 0.36. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 2.19.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 44, this industry ranks in the top 18% of all industries, numbering over 250.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.