StoneCo Misses on EPS and Cuts 2026 Outlook, Withdraws 2027 Targets

StoneCo reported quarterly EPS of $0.45 on Thursday, missing the consensus estimate of $0.48 by $0.03. The Brazilian fintech (a company combining payments and financial services on digital platforms) also posted revenue of $126.71 million against analyst expectations of $715.99 million — a gap large enough to signal the two figures measure different accounting bases, but a miss headline either way. The quarter came with profitability metrics of 22.19% return on equity and a 22.92% net margin.

The harder news sat in the guidance. StoneCo cut its 2026 outlook and pulled its 2027 targets entirely.

What did StoneCo cut from its 2026 outlook?

On the earnings call, management reduced 2026 adjusted gross profit guidance to BRL 6.1–6.2 billion, down from BRL 6.6–7.0 billion. Adjusted basic EPS guidance (earnings per share excluding one-off items) fell to BRL 9.1–9.5 from BRL 10.8–11.4. The company also updated FY 2026 EPS guidance to a range of $2.101–$2.218 — below the consensus estimate of $2.210. StoneCo withdrew its 2027 targets altogether, citing macroeconomic uncertainty and limited visibility on interest rates and credit conditions.

In plain words: management doesn't trust the next two years enough to promise numbers.

What's working and what isn't?

The merchant business showed early signs of stabilization. Total payment volume (TPV, the total value of transactions processed) growth accelerated, overall market share stabilized, and Stone gained modest share in its segment. The active merchant base reached 5.1 million. Card TPV, however, continued to decline year over year.

Credit is the pressure point. Credit-related provisions and higher operating costs weighed on profitability, and the company is reviewing its credit models for a tougher economy. Cost of risk (the share of the loan book lost to defaults and provisions) improved to 20.1% from 21.5% in the prior quarter, but management expects the decline toward the mid-to-high teens to take longer than anticipated.

Still, the credit portfolio grew 78% year over year to BRL 4.1 billion, with growth increasingly directed toward government-backed loans. Management said newer credit cohorts are performing better. StoneCo also repurchased more than BRL 200 million of shares during the quarter and reaffirmed plans to distribute BRL 2 billion in excess capital during 2026.

How did the stock and analysts respond?

Shares rose $0.04, or 0.6%, to $7.76 on Friday on volume of 7,160,425 shares versus an average of 5,625,680. The stock carries a market cap of $1.93 billion, a price-to-earnings ratio of 3.13, a PEG ratio of 0.22 and a beta of 1.76. Its fifty-day moving average sits at $9.75 and its two-hundred-day average at $11.86; the one-year range spans $7.06 to $18.19.

The analyst response was uniformly cooler:

• Goldman Sachs cut its price target from $11.00 to $9.50 on October 30, keeping a "neutral" rating.
• Weiss Ratings downgraded from "hold (c)" to "hold (c-)" on November 3.
• UBS downgraded from "buy" to "neutral" on November 5, slashing its target from $15.00 to $8.50.
• Jefferies initiated coverage on July 23 with a "hold" and a $12.60 target.

Two analysts rate the stock Buy and eight Hold, producing a consensus rating of "Hold" with a $12.30 consensus target, per MarketBeat.com. Separately, Director Silvio Morais sold 21,000 shares on September 2 at an average of $9.91, totaling $208,110; insiders own 11.25% of the stock.

StoneCo, which serves Brazilian merchants through the Stone, Pagar.me and Linx brands, is now trading at a fraction of its multiples from a year ago — the market has priced the miss, but not yet the recovery.