• EN

    • -+ 0.00%
    -+ 0.00%
    -+ 0.00%

    StoneCo (STNE) Falls After Brazil Election Shock, Is The 44% Undervaluation Compelling?

    Simply Wall St·10/27/2026 05:22:43
    Listen to the news

    StoneCo (STNE) is back in the spotlight after Brazil’s presidential election result triggered a sharp selloff in local financial stocks, as investors quickly repriced political and fiscal risk.

    StoneCo’s share price reaction has been extreme, with the stock down 27.44% in the last session, contributing to a 30 day share price return of down 10.43% and a year to date share price decline of 43.29% as political risk has been quickly repriced. Over a longer horizon, the picture is mixed, with a 1 year total shareholder return down 48.00% but a positive 3 year total shareholder return of 3.63%, suggesting that short term momentum is fading even though longer term holders have at least broken even on a total return basis over that period.

    Spot shifting sentiment around StoneCo in the context of a broader set of opportunities by scanning our hand-picked 29 high quality undervalued stocks now under pressure or potentially mispriced after the latest Brazilian election shock.

    StoneCo now trades at a steep discount to both analyst targets and some fair value estimates after the post-election slump. Is that gap compensation for real political risk, or has caution swung too far?

    Most Popular Narrative: 44% Undervalued

    StoneCo’s most followed narrative points to a fair value of $14.81 against a last close of $8.33, framing the post election selloff as a sizable valuation gap that hinges on how its entrepreneur banking model plays out.

    The ongoing repositioning of StoneCo toward a full-service bank for entrepreneurs, with a unified merchant account that includes payments, banking and credit, is widening the chance to raise average revenue per active client and support more durable earnings streams.

    Integration of Pagar.me into the main StoneCo account, allowing merchants to manage physical and digital operations in one place, is aimed at capturing a larger share of faster-growing online and Pix-linked flows, which can support transaction revenue and open more cross-selling of banking and credit.

    See why 70 investors see StoneCo as 44% undervalued.

    Result: Fair Value of $14.81 (UNDERVALUED)

    Still, the StoneCo narrative depends on two pressure points: credit losses staying contained and modest Total Payment Volume trends not dragging on fee income longer than expected.

    Find out about the key risks to this StoneCo narrative.

    Next Steps

    Seen enough debate on StoneCo and still sitting on the fence? Act while sentiment is volatile and weigh the upside against the downside using the 3 key rewards and 3 important warning signs.

    Looking for more ideas beyond StoneCo?

    Do not stop with StoneCo. Use the Simply Wall Street Screener to widen your opportunity set and pressure test where your next dollar should really go.