STNE · StoneCo
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $9.80
Note written ·
Price against the kill line
19.2% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $9.80, on record since 11 November 2026. The shares are down 14.6% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
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.
Research onlyNot in the portfolio.
The business · as of
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, 12 November 2026).
What is changing, and what follows · as of
- What is changing now
- On 12 November 2026 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.
- What follows for the company
- 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.
- What follows for its customers, suppliers and competitors
- 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.
What the price assumes · as of
No valuation multiples are available because StoneCo files on Form 6-K. The shares closed at $7.92 on 13 November 2026, 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.
Key figures from the filings · Technology
Filed figures are not available: no quarterly report in US GAAP with the SEC (a foreign filer reports on Form 20-F or 40-F).
All filed numbers
What StoneCo reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): the share of shares outstanding is not available, 1.1 days of average trading to cover, −13.0% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $208K |
| 12 monthsfrom | $217K | $407K |
Linked companies · as of
- Competitors:
- PAGS
The thesis
StoneCo'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.
StoneCo reported third-quarter 2026 results after the US close on 12 November 2026 (Form 6-K). The shares closed at $7.92 on 13 November 2026, against $7.72 on 12 November 2026. That is 56.5% below the 52-week intraday high of $18.19 set on 10 February 2026, and the 3-month change on adjusted closes is −14.6%.
The 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 26 October 2026, after Lula's win in the runoff (51.8% to 48.2%, per TIKR).
Bullish and bearish views on StoneCo Ltd.
The bull case on StoneCo Ltd. (STNE), in brief: early-stage delinquencies fell sharply. The bear case: late-stage losses worsened.
Bull case
- 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, 12 November 2026). Cost of risk eased to 20.1% from 21.5%.
- The 2026 earnings outlook moved up. Company news headlines on 12 November 2026 say adjusted EPS (earnings per share) guidance rose to $2.10–$2.22 from $2.00–$2.11, against a $2.21 estimate.
- 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.
- 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, 12 November 2026).
- The Selic sits below management's assumption. On 13 August 2026 management said low-end guidance assumed about 14% at year end. Brazil's central bank held the rate at 13.75% on 4 November 2026 in a unanimous vote (Atlas Público).
Bear case
- 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.
- 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.
- 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).
- 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.
- Card volume is shrinking. Card payment volume fell 2.7% to R$114.3 billion (Form 6-K, 12 November 2026).
- Rate cuts have stopped. The central bank paused on 4 November 2026 after five cuts. TIKR's 26 October 2026 analysis expects a weaker real and higher rates for longer after the election.
- An insider sold at higher prices. Director Silvio Jose Morais sold 21,000 shares at $9.91 on 2 September 2026 (SEC Form 4, filed 10 September 2026).
Price setup
The shares closed at $7.92 on 13 November 2026. The 52-week closing low is $7.39, set on 3 November 2026. The first session after the report closed higher than the session before it ($7.72 on 12 November 2026), a modest reaction to a result that raised guidance and worsened late-stage credit.
As of 13 November 2026, 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 17 August 2026.
Catalysts ahead
- ~28 January 2027 (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.
- ~1 March 2027 (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%.
What would change the view
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.
What it trades with
StoneCo trades with Brazilian risk assets as a group. On 26 October 2026, 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.
Selic 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.
The evidence, claim by claim (8)
- 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. StoneCo third-quarter 2026 earnings release, Form 6-K · as of
- 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%. StoneCo third-quarter 2026 earnings release, Form 6-K · as of
- 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. StoneCo third-quarter 2026 earnings release, Form 6-K · as of
- 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. StoneCo third-quarter 2026 earnings release, Form 6-K · as of
- 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. StoneCo third-quarter 2026 earnings release, Form 6-K · as of
- 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. Company news headlines · as of
- Brazil's central bank held the Selic at 13.75% in a unanimous vote, ending a run of five cuts. Atlas Público; Investidor10 · as of
- Director Silvio Jose Morais sold 21,000 shares at $9.91 on the open market. SEC Form 4, filed 10 September 2026 · as of
Sources
- StoneCo Ltd. - Form 6-K - FY2026 · sec.gov
- Copom mantém a Selic em 13,75% ao ano na 1ª decisão após vitória de Lula · investidor10.com.br
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