StoneCo (STNE) is back in focus after reporting second quarter 2026 results, with revenue of R$3,587.38 million and net income of R$444.59 million, alongside a contrasting first half profit picture.

StoneCo’s share price has fallen 14.35% over the past 30 days and is down 34.99% year to date, while the 1 year total shareholder return is down 25.13%. This suggests that momentum has weakened despite the latest results.

If this earnings move has you reassessing your watchlist, it can help to scan for other opportunities and see what stands out in the market through the 21 top founder-led companies

So is the recent slide in StoneCo mainly the market cooling on the story, or is it a direct read on a business that just posted mixed quarterly and first half earnings? And what does that imply for today’s valuation?

Most Popular Narrative: 41.1% Undervalued

StoneCo closed at $9.55, while the most followed narrative places fair value at $16.23. That gap sits at the center of the current debate.

Cross-selling of end-to-end financial solutions (payments, digital banking, working capital credit) is increasing client engagement and wallet share, demonstrated by growing deposit balances (+36% year-over-year) and credit portfolio expansion (+25% sequentially), supporting higher recurring revenue and long-term net earnings improvement.

Read the complete narrative. Read the complete narrative.

Want to understand why this narrative assigns a higher value to StoneCo? It leans heavily on how future revenue, margins and earnings multiples work together. It also explores which specific long term growth and profitability paths would need to occur for that valuation to hold up.

The narrative also rests on a discount rate of 9.2% and assumes StoneCo can balance slower forecast earnings with capital returns and profitability shifts over time. That combination underpins the fair value of $16.23 relative to today’s share price and frames how much of the recent share price weakness may already reflect lower earnings expectations.

Result: Fair Value of $16.23 (UNDERVALUED)

However, this StoneCo story can change quickly if Brazilian small business credit losses remain elevated or if competition in payments and PIX further compresses margins.

Next Steps

With the mixed mood around StoneCo, it helps to see both sides quickly and form your own view based on the full picture of 3 key rewards and 2 important warning signs.

Looking for more investment ideas beyond StoneCo?

If StoneCo has you rethinking your next move, do not stop here. The market is full of other opportunities that could better match your goals.

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• Prioritise resilience and sleep easier at night by scanning stocks with stronger financial footing through the solid balance sheet and fundamentals stocks screener (50 results).
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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.