StoneX Group (SNEX): Assessing Valuation Following Strong Q4 Earnings and Higher Net Income

StoneX Group (SNEX) has just released its fourth quarter earnings, reporting higher revenue and improved net income compared to the previous year. Investors are considering what these results might mean for the stock’s future direction.

See our latest analysis for StoneX Group.

Despite StoneX Group’s positive earnings, the share price has slipped recently, down 15.8% over the past three months. However, it is still up 31.3% year-to-date. The company’s robust three-year total shareholder return of 101% suggests that longer-term momentum remains strong as investors continue to weigh the latest results against broader trends.

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With shares currently trading below analyst price targets and solid earnings growth on display, the key question is whether StoneX stock offers real value at these levels or if future gains are already reflected in the current price.

Price-to-Earnings of 15.5x: Is it justified?

StoneX Group is currently trading at a price-to-earnings (P/E) ratio of 15.5x, placing it below both the US market average and industry peers. With a last close price of $87.71, this suggests investors may still see value compared to the typical peer multiple.

The P/E ratio measures how much investors are willing to pay for each dollar of earnings. It is a key benchmark for profitability in the capital markets sector. For StoneX, a lower P/E compared to peers could signal the market is underestimating the company’s sustained earnings performance, especially following a strong earnings year.

Compared to the US Capital Markets industry average of 23.6x, StoneX’s P/E is significantly lower. This further supports the case for relative value. Looking at the estimated “Fair” P/E of 15.9x, the stock also appears close to what the market could eventually price in if current momentum holds.

Explore the SWS fair ratio for StoneX Group

Result: Price-to-Earnings of 15.5x (UNDERVALUED)

However, lingering share price volatility and potential slowdowns in net income growth remain risks that could disrupt the current value narrative for StoneX.

Find out about the key risks to this StoneX Group narrative.

Another View: What Does the SWS DCF Model Suggest?

While StoneX Group’s earnings-based valuation hints at an attractive price, our DCF model presents a more conservative perspective. According to this approach, StoneX is currently trading above its fair value estimate. Could future earnings momentum shift this perspective, or is caution warranted?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out StoneX Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 929 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own StoneX Group Narrative

If you have a different perspective or want to dive deeper into the numbers yourself, you can build your own analysis and story in just a few minutes. Do it your way

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding StoneX Group.

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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.