10 Best Tech Stocks to Invest In On the Dip

8. StoneCo Ltd. (NASDAQ:STNE)

Share Price: $10.76

Year-To-Date Performance: -39.11%

Analyst Upside Potential: 49.34%

StoneCo Ltd. (NASDAQ:STNE) is a financial technology company that provides various software solutions to help businesses manage their transactions and operations more effectively. The company specializes in technology solutions that facilitate electronic payments and financial services for businesses, particularly small and medium-sized enterprises.

Although the stocks have been down around 39% on a year-to-date basis, particularly due to the hit it took by the headwinds during the pandemic and the mishap of unreliable government data usage while assessing the creditworthiness of clients. However, during fiscal 2024, StoneCo Ltd. (NASDAQ:STNE) demonstrated significant progress toward its strategic goals, achieving several key financial metrics and maintaining a strong market position.

The financial services segment of the company showed strong profitability, with the take rate for Micro, Small, and Medium Businesses (MSMBs) reaching a record 2.58%. This increase was driven by a growing credit portfolio and stable banking revenues amid a competitive payments environment. Moreover, the company also reported robust growth in transaction volumes, particularly in PIX QR Code transactions. The total payment volume (TPV) for MSMB cards grew by 16% year-to-date, while overall MSMB TPV increased by 23% during the same time.

Ave Maria World Equity Fund stated the following regarding StoneCo Ltd. (NASDAQ:STNE) in its fourth quarter 2023 investor letter:

“StoneCo Ltd. (NASDAQ:STNE) provides solutions that enable merchants and integrated partners to conduct electronic commerce seamlessly across in-store, online, and mobile channels in Brazil. StoneCo has faced near-term operational challenges because of the pandemic and high levels of inflation in Brazil. The company appears to be moving past these challenges and it appears that the successful integration of the newly acquired software business with its payments business will drive substantial shareholder value longer term.”