Why StoneCo stock is on more watchlists right now

StoneCo (STNE) has drawn fresh attention after a month long share price decline of 20.5%, just as the company prepares to report earnings on May 14, 2026.

Investors are weighing that recent underperformance against expectations for year over year earnings and revenue growth, trying to decide whether the current price reflects near term risks or potential opportunity.

Over the past year, StoneCo’s 4.03% total shareholder return contrasts with a 22.6% year to date share price decline and a 29.8% 90 day share price decline, suggesting recent momentum has faded even as longer term holders remain modestly ahead.

With interest in StoneCo picking up again, it may be a good moment to broaden your watchlist and see what else fits your thesis across 19 top founder-led companies

With the stock down sharply in recent months and trading at an apparent discount to some analyst targets and intrinsic estimates, you have to ask: Is StoneCo underappreciated right now, or is the market already pricing in future growth?

Most Popular Narrative: 44% Undervalued

At a last close of $11.37 against a narrative fair value of $20.29, StoneCo is framed as materially undervalued, with that gap resting on detailed earnings and cash flow assumptions.

Focused divestment of capital intensive software assets has freed up substantial capital (about 25% of market capitalization), enabling StoneCo to redeploy resources to higher growth, higher margin financial services and to return excess capital via share buybacks, positively impacting EPS and net margins.

Want to see what justifies that higher fair value? The narrative leans heavily on rising profitability, richer margins, and a valuation multiple that assumes meaningful earnings compounding.

Result: Fair Value of $20.29 (UNDERVALUED)

However, this depends on Brazil’s macro backdrop and competition not tightening too much, and on credit losses staying contained as StoneCo expands its lending book.

Next Steps

With both risks and rewards in the picture, does the story so far feel convincing enough for you? Act quickly, review the underlying data, and weigh both sides for yourself with 4 key rewards and 1 important warning sign

Looking for more investment ideas?

If you stop at StoneCo, you could miss stocks that line up even better with your goals, so widen your search now and put the data to work.

• Zero in on potential mispricings by scanning 44 high quality undervalued stocks that may offer quality fundamentals at prices that appear to lag behind their underlying metrics.
• Strengthen the resilience of your portfolio by reviewing the solid balance sheet and fundamentals stocks screener (45 results) to spot companies with financial foundations that may better handle tough conditions.
• Hunt for future standouts early using the screener containing 23 high quality undiscovered gems before broader attention and fresh capital potentially crowd the opportunity set.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.