Is StoneCo’s (STNE) Buyback Pace a Mark of Confidence or Strategic Caution?

• StoneCo Ltd. reported its third quarter 2025 results, highlighted by increased revenue of R$3.57 billion and net income of R$706.77 million, both up compared to the previous year.
• In addition to operational progress, the company continued robust share buybacks and received an upgrade reflecting growing analyst confidence in its earnings outlook.
• We'll explore how StoneCo's strong revenue and earnings growth in the latest quarter influences its previously established investment narrative.

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StoneCo Investment Narrative Recap

To be a StoneCo shareholder today, one has to believe in Brazil’s transition from cash to digital payments and StoneCo’s ability to offer integrated financial solutions to small businesses. The company’s third quarter results reinforce this outlook, with strong revenue and net income growth serving as the key short-term catalyst. The biggest risk remains exposure to credit quality and provisions; these results suggest positive momentum, but the impact on credit risks is not yet material.

Among the recent announcements, StoneCo’s share buyback program stands out as particularly relevant. Returning R$2.8 billion to shareholders over the last twelve months signals management’s confidence and directly supports earnings per share, complementing the quarter’s strong financial performance without altering immediate risks or catalysts.

But even with these positives, investors should pay close attention to the ongoing risk from credit portfolio expansion and what happens if...

Read the full narrative on StoneCo (it's free!)

StoneCo's outlook anticipates R$17.4 billion in revenue and R$5.0 billion in earnings by 2028. This is based on an expected annual revenue growth rate of 8.2% and represents a R$6.3 billion increase in earnings from the current R$-1.3 billion.

Uncover how StoneCo's forecasts yield a $19.25 fair value, a 14% upside to its current price.

Exploring Other Perspectives

Based on 10 fair value estimates from the Simply Wall St Community, opinions range widely for StoneCo from R$14.33 to R$46.29 per share. This variation reflects how perspectives on the risks tied to credit growth and provisions can shape contrasting views about the company’s future.

Explore 10 other fair value estimates on StoneCo - why the stock might be worth over 2x more than the current price!

Build Your Own StoneCo Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your StoneCo research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free StoneCo research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate StoneCo's overall financial health at a glance.

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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.