Stoneco hits lower rail of channel and gets bullish signal from Tickeron’s Trend Prediction Engine
Stoneco (Nasdaq: STNE) debuted on the Nasdaq exchange on October 25, 2018. With the stock coming up on its first anniversary, it just recently hit the lower rail of an upwardly sloped trend channel and it had a bullish signal generated from Tickeron’s Trend Prediction Engine.
Looking at the stock’s daily chart over the past year, it has been rather volatile for investors. We see that the IPO price was $32 and the stock promptly fell to a low of $16.14 in December. Of course the overall market was falling sharply in the fourth quarter, so it wasn’t a great time for an IPO.
The stock promptly rallied back from its low and by the beginning of April the stock had risen above the $45 level, a jump of 180% from its low to its high. The stock fell once again and dropped to the $25 level in the first few weeks of April. The stock consolidated from mid-April through the end of May.
The low at the end of May marked the beginning of the trend channel. If we connect that low with the low from August, we get the lower rail. The parallel upper rail connects the highs from July and August.
Because of the short price history, there isn’t a lot of past data to work with from Tickeron, but the Trend Prediction Engine generated a bullish signal for Stoneco on October 4. The signal showed a confidence level of 73% and it calls for a gain of at least 4% within the next month. There have only been three previous bullish signals for Stoneco, but all three have been successful.
In addition to the signal from Tickeron and hitting the lower rail of the channel, the stock just moved back above its 50-day moving average. According to Tickeron’s records, in 4 of 4 similar backtested cases where Stoneco's price crossed above its 50-day moving average, its price rose further within the subsequent month. The odds of a continued uptrend are 90%.
Stoneco’s fundamentals are somewhat mixed at this time. The company saw earnings jump by 157% in the most recent quarterly report while sales jumped 69%. Sales have averaged growth of 69% per year over the last three years and the company boasts a profit margin of 31.1%. All of these indicators are really good, but there are some areas of concern as well.
The Tickeron Valuation Rating of 77 indicates that the company is slightly overvalued in the industry. A rating of 1 points to the most undervalued stocks, while a rating of 100 points to the most overvalued stocks. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization.
The Tickeron Profit vs. Risk Rating for Stoneco is 100, indicating that the returns do not compensate for the risks. Stoneco’s unstable profits reported over time resulted in significant drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating for the industry is 78, placing this stock worse than average.
Looking at the sentiment toward Stoneco, we see pretty pessimistic readings from analysts and short sellers. There are 11 analysts covering the stock at this time with five “buy” ratings, five “hold” ratings, and one “sell” rating. This puts the buy percentage at 45.5% and that is well below the average buy percentage.
The short interest ratio is at 6.87 currently and that is well above average as well. Both of these indicators point to high levels of pessimism for the stock. From a contrarian viewpoint, this could be a good thing if the stock continues to trend higher.
Aroon Indicator for STNE shows an upward move is likely
STNE's Aroon Indicator triggered a bullish signal on March 04, 2025. Tickeron's A.I.dvisor detected that the AroonUp green line is above 70 while the AroonDown red line is below 30. When the up indicator moves above 70 and the down indicator remains below 30, it is a sign that the stock could be setting up for a bullish move. Traders may want to buy the stock or look to buy calls options. A.I.dvisor looked at 208 similar instances where the Aroon Indicator showed a similar pattern. In of the 208 cases, the stock moved higher in the days that followed. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 58 cases where STNE's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where STNE advanced for three days, in of 296 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on February 28, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on STNE as a result. In of 80 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for STNE turned negative on February 26, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 51 similar instances when the indicator turned negative. In of the 51 cases the stock turned lower in the days that followed. This puts the odds of success at .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where STNE declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
STNE broke above its upper Bollinger Band on February 18, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. STNE’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.793) is normal, around the industry mean (31.181). P/E Ratio (26.076) is within average values for comparable stocks, (162.153). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (2.763). Dividend Yield (0.000) settles around the average of (0.032) among similar stocks. P/S Ratio (2.365) is also within normal values, averaging (59.007).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. STNE’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 88, placing this stock worse than average.
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a financial technology solutions provider
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