The most recent trading session ended with StoneCo Ltd. (STNE) standing at $10.57, reflecting a +0.86% shift from the previouse trading day's closing. The stock outpaced the S&P 500's daily gain of 0.38%. On the other hand, the Dow registered a loss of 0.03%, and the technology-centric Nasdaq increased by 0.87%.

Heading into today, shares of the company had gained 14.66% over the past month, outpacing the Computer and Technology sector's loss of 8.94% and the S&P 500's loss of 5.59% in that time.

Investors will be eagerly watching for the performance of StoneCo Ltd. in its upcoming earnings disclosure. It is anticipated that the company will report an EPS of $0.27, marking a 6.9% fall compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $572.46 million, reflecting an 8.13% fall from the equivalent quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.19 per share and revenue of $2.56 billion. These totals would mark changes of -11.85% and +4.13%, respectively, from last year.

Investors should also pay attention to any latest changes in analyst estimates for StoneCo Ltd. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 3.18% higher. StoneCo Ltd. currently has a Zacks Rank of #2 (Buy).

In terms of valuation, StoneCo Ltd. is currently trading at a Forward P/E ratio of 8.81. This represents a discount compared to its industry's average Forward P/E of 26.28.

Investors should also note that STNE has a PEG ratio of 0.41 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Software industry currently had an average PEG ratio of 2.01 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 74, which puts it in the top 30% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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