{
  "@context": "https://frontierpicks.com/schemas/dossier.v1.json",
  "ticker": "STNE",
  "name": "StoneCo Ltd.",
  "url": "https://frontierpicks.com/dossiers/STNE/",
  "json_url": "https://frontierpicks.com/dossiers/STNE.json",
  "status": "DORMANT",
  "current_conviction": "LOW",
  "archetype": {
    "code": "a5",
    "n": 5
  },
  "current_thesis": "StoneCo's shares are more likely to lag the S&P 500 over three months: its over-90-day loan-loss ratio rose to 9.92% in the third quarter and adjusted gross profit fell 8.0%, despite a raised 2026 earnings outlook. Brazil's late-January 2027 rate decision and the fourth-quarter report settle it.",
  "invalidation_trigger": "A daily close above $9.80, over the 50-day average of closes, which would show the shares leading the S&P 500. A fourth-quarter over-90-day non-performing loan (NPL) ratio below the 9.92% of the third quarter would also show the shares leading.",
  "catalyst_date": null,
  "portfolio": null,
  "pick": null,
  "themes": [
    "emerging-markets",
    "fintech-consumer-credit"
  ],
  "tags": [],
  "sources": [],
  "caveats": [],
  "source_links": [
    {
      "title": "StoneCo Ltd. - Form 6-K - FY2026",
      "url": "https://www.sec.gov/Archives/edgar/data/0001745431/000207097926000294/stonecoearningsrelease3q26.htm",
      "date": null
    },
    {
      "title": "Copom mantém a Selic em 13,75% ao ano na 1ª decisão após vitória de Lula",
      "url": "https://investidor10.com.br/noticias/copom-mantem-a-selic-em-13-75-ao-ano-na-1-decisao-apos-vitoria-de-lula-123689/",
      "date": null
    }
  ],
  "evidence": [
    {
      "claim": "Third-quarter 2026 revenue was R$3,686.1 million, up 3.3% from a year earlier; adjusted gross profit was R$1,475.9 million, down 8.0%, a 40.0% margin against 45.0% a year earlier.",
      "source": "StoneCo third-quarter 2026 earnings release, Form 6-K",
      "as_of": "2026-09-30"
    },
    {
      "claim": "The over-90-day NPL ratio rose to 9.92% from 8.60% in the second quarter and 5.03% a year earlier; the 15-to-90-day ratio fell to 4.49% from 6.00%; coverage was 195.6% against 203.6%.",
      "source": "StoneCo third-quarter 2026 earnings release, Form 6-K",
      "as_of": "2026-09-30"
    },
    {
      "claim": "The credit portfolio was R$4,090.1 million, up 78.0% from a year earlier and 9.0% from the previous quarter; cost of risk was 20.1% against 21.5% in the second quarter.",
      "source": "StoneCo third-quarter 2026 earnings release, Form 6-K",
      "as_of": "2026-09-30"
    },
    {
      "claim": "Total payment volume was R$147.4 billion, up 5.1%; card volume fell 2.7% to R$114.3 billion while PIX QR Code volume rose 45.3% to R$33.1 billion.",
      "source": "StoneCo third-quarter 2026 earnings release, Form 6-K",
      "as_of": "2026-09-30"
    },
    {
      "claim": "Share repurchases were R$212.0 million in the third quarter against R$739.0 million in the second; the release cites R$2.8 billion over the past twelve months.",
      "source": "StoneCo third-quarter 2026 earnings release, Form 6-K",
      "as_of": "2026-09-30"
    },
    {
      "claim": "Third-quarter adjusted EPS of $0.45 missed the $0.49 estimate and sales of $717.136 million beat the $715.070 million estimate; 2026 adjusted EPS guidance was raised to $2.10–$2.22 from $2.00–$2.11, against a $2.21 estimate.",
      "source": "Company news headlines",
      "as_of": "2026-11-12"
    },
    {
      "claim": "Brazil's central bank held the Selic at 13.75% in a unanimous vote, ending a run of five cuts.",
      "source": "Atlas Público; Investidor10",
      "as_of": "2026-11-04"
    },
    {
      "claim": "Director Silvio Jose Morais sold 21,000 shares at $9.91 on the open market.",
      "source": "SEC Form 4, filed 2026-09-10",
      "as_of": "2026-09-02"
    }
  ],
  "view_changes": [],
  "frame": {
    "as_of": "2026-11-14",
    "business": "StoneCo sells card-payment terminals, PIX QR Code acceptance, banking and working-capital loans to small and mid-sized Brazilian merchants, and earns fees and interest on that volume. Third-quarter 2026 revenue was R$3,686.1 million (Form 6-K, 2026-11-12).",
    "change": {
      "now": "On 2026-11-12 StoneCo reported third-quarter revenue of R$3,686.1 million, up 3.3% from a year earlier; company news headlines say it raised 2026 adjusted EPS guidance to $2.10–$2.22 from $2.00–$2.11.",
      "next": "Adjusted gross profit fell 8.0% from a year earlier to R$1,475.9 million, a 40.0% margin against 45.0%; buybacks slowed to R$212.0 million from R$739.0 million in the second quarter.",
      "linked": "StoneCo's card volume fell 2.7% while PIX QR Code volume, on Brazil's central-bank payment rail, grew 45.3%; PagSeguro (PAGS) competes for the same small merchants and the same rate and credit backdrop."
    },
    "priced_in": "No valuation multiples are available because StoneCo files on Form 6-K. The shares closed at $7.92 on 2026-11-13, 56.5% below the 52-week high. That price holds only if earnings stay near the raised 2026 range while the adjusted gross margin, 40.0% in the third quarter against 45.0% a year earlier, stops falling.",
    "links": {
      "customers": [],
      "suppliers": [],
      "competitors": [
        {
          "ticker": "PAGS",
          "url": "https://frontierpicks.com/dossiers/PAGS/"
        }
      ]
    }
  },
  "filed_numbers": {
    "as_of": "2026-11-13",
    "sector": "Technology",
    "financials": {
      "status": "not available",
      "reason": "no quarterly report in US GAAP with the SEC (a foreign filer reports on Form 20-F or 40-F)",
      "close_date": "2026-11-13",
      "latest_quarter": null,
      "figures": {}
    },
    "short_interest": {
      "status": "ok",
      "settlement": "2026-10-15",
      "published": "2026-10-26",
      "short_pct_of_outstanding": null,
      "days_to_cover": 1.1,
      "change_pct": -13
    },
    "insiders": {
      "status": "ok",
      "as_of": "2026-11-15",
      "windows": [
        {
          "days": 90,
          "status": "ok",
          "from": "2026-08-18",
          "bought_usd": 0,
          "sold_usd": 208110,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        },
        {
          "days": 365,
          "status": "ok",
          "from": "2025-11-16",
          "bought_usd": 217253.4,
          "sold_usd": 407164,
          "bought_unpriced": 0,
          "sold_unpriced": 0
        }
      ]
    }
  },
  "body_markdown": "## Current Thesis\n\nStoneCo's shares are more likely to lag the S&P 500 over the next three months. The over-90-day non-performing loan (NPL) ratio rose to 9.92% in the third quarter and adjusted gross profit fell 8.0% from a year earlier, even though company news headlines say 2026 earnings guidance was raised. Brazil's central bank decision in late January 2027 and the fourth-quarter report settle whether credit losses have turned.\n\nStoneCo reported third-quarter 2026 results after the US close on 2026-11-12 (Form 6-K). The shares closed at $7.92 on 2026-11-13, against $7.72 on 2026-11-12. That is 56.5% below the 52-week intraday high of $18.19 set on 2026-02-10, and the 3-month change on adjusted closes is −14.6%.\n\nThe over-90-day ratio did not fall below 8.60%, so the business test for a lead was not met. The shares have recovered only part of the 29% drop on 2026-10-26, after Lula's win in the runoff (51.8% to 48.2%, per TIKR).\n\n## Bull Case\n\n- **Early-stage delinquencies fell sharply.** The 15-to-90-day NPL ratio was 4.49% in the third quarter, down from 6.00% in the second (Form 6-K, 2026-11-12). Cost of risk eased to 20.1% from 21.5%.\n- **The 2026 earnings outlook moved up.** Company news headlines on 2026-11-12 say adjusted EPS (earnings per share) guidance rose to $2.10–$2.22 from $2.00–$2.11, against a $2.21 estimate.\n- **Revenue and payment volume grew.** Revenue rose 3.3% to R$3,686.1 million and total payment volume rose 5.1% to R$147.4 billion. PIX QR Code volume, on Brazil's central-bank payment rail, grew 45.3% to R$33.1 billion.\n- **The card-issuer charge did not recur.** The R$200.3 million allowance for card issuers in distress booked in the second quarter was absent from the third (Form 6-K, 2026-11-12).\n- **The Selic sits below management's assumption.** On 2026-08-13 management said low-end guidance assumed about 14% at year end. Brazil's central bank held the rate at 13.75% on 2026-11-04 in a unanimous vote (Atlas Público).\n\n## Bear Case\n\n- **Late-stage losses worsened.** The over-90-day ratio rose to 9.92% from 8.60% in the second quarter and 5.03% a year earlier. Coverage slipped to 195.6% from 203.6%, while the credit portfolio grew 78.0% to R$4,090.1 million.\n- **Profit per unit of sales fell.** Adjusted gross profit dropped 8.0% to R$1,475.9 million, a 40.0% margin against 45.0% a year earlier. Revenue growth of 3.3% did not carry through to gross profit.\n- **Earnings missed the estimate.** Company news headlines put third-quarter adjusted EPS at $0.45 against a $0.49 estimate; adjusted basic EPS was R$2.33, down 2.5% from a year earlier (Form 6-K).\n- **Buybacks slowed.** Repurchases were R$212.0 million in the third quarter against R$739.0 million in the second. The R$2.8 billion over twelve months had been the main lift to per-share earnings.\n- **Card volume is shrinking.** Card payment volume fell 2.7% to R$114.3 billion (Form 6-K, 2026-11-12).\n- **Rate cuts have stopped.** The central bank paused on 2026-11-04 after five cuts. TIKR's 2026-10-26 analysis expects a weaker real and higher rates for longer after the election.\n- **An insider sold at higher prices.** Director Silvio Jose Morais sold 21,000 shares at $9.91 on 2026-09-02 (SEC Form 4, filed 2026-09-10).\n\n## Setup & Price Structure\n\nThe shares closed at $7.92 on 2026-11-13. The 52-week closing low is $7.39, set on 2026-11-03. The first session after the report closed higher than the session before it ($7.72 on 2026-11-12), a modest reaction to a result that raised guidance and worsened late-stage credit.\n\nAs of 2026-11-13, the 50-day average of adjusted closes is $9.70 and the 200-day average is $10.99. The shares sit below both. The 3-month reference close was $9.27 on 2026-08-17.\n\n## Catalyst Calendar\n\n- **~2027-01-28 (est.):** Brazil central bank Copom rate decision (meeting listed for 27–28 January). Shows whether the Selic pause at 13.75% continues or cuts resume, which sets StoneCo's funding costs and the earnings shortfall management flagged against guidance.\n- **~2027-03-01 (est.):** StoneCo fourth-quarter and full-year 2026 results. Shows whether the over-90-day NPL ratio has turned down from 9.92% as the lower 15-to-90-day ratio of 4.49% implies, and whether the gross margin stabilises near 40.0%.\n\n## What Would Change Our Mind\n\nA daily close above $9.80, over the 50-day average of closes, which would show the shares leading the S&P 500. A fourth-quarter over-90-day non-performing loan (NPL) ratio below the 9.92% of the third quarter would also show the shares leading.\n\n## Correlation Notes\n\nStoneCo trades with Brazilian risk assets as a group. On 2026-10-26, TIKR reported the iShares MSCI Brazil ETF down 25% before the open, PagSeguro (PAGS) down 25%, Inter & Co down 36% and Nu Holdings down 21%, alongside StoneCo's 29% fall.\n\nSelic expectations are the main shared driver. They set StoneCo's funding costs and the value the market places on Brazilian financials. US-dollar returns also carry the Brazilian real's moves against the dollar, so a weaker real lowers the shares' dollar value even when results in reais hold.",
  "first_seen": "2026-11-10",
  "last_analyzed": "2026-11-14T08:40:12+00:00",
  "last_synthesized": "2026-11-14",
  "date_modified": "2026-11-14",
  "license": "Content © FrontierPicks. Cite the canonical URL."
}