Key Takeaways
- Brazilian fintechs StoneCo (STNE) and Inter & Co (INTR) have recorded significant year-to-date share price increases of approximately 90% and 60%, respectively, in 2025.
- Despite this growth, both companies appear to trade at discounted price-to-earnings and price-to-sales ratios compared to the Brazilian fintech industry average.
- Strong revenue growth, outpacing industry norms, is being driven by an expanding client base, higher transaction volumes, and successful cross-selling of financial products.
- Key risks for investors include Brazil’s macroeconomic volatility, potential regulatory changes in the financial sector, and intense market competition.
- Upcoming Q2 2025 earnings reports will be a critical test of whether the current momentum and valuations are sustainable.
The fintech sector has been a focal point for investors seeking growth in emerging markets, and two names, StoneCo Ltd. (STNE) and Inter & Co (INTR), have recently drawn attention for their significant year-to-date (YTD) performance. Posts on X have highlighted these stocks as potentially undervalued, with STNE reportedly up 90% and INTR up 60% in 2025 YTD. This analysis delves into the financial metrics, market positioning, and growth drivers behind these Brazilian fintech players to assess whether their valuations still offer room for upside.
StoneCo Ltd. (STNE): A Surge in Momentum
StoneCo, a payments and financial services provider focused on small and medium-sized businesses in Brazil, has seen remarkable share price growth in 2025. Recent data indicates a YTD increase aligning with the sentiment on X of around 90% as of mid-July 2025. This performance appears driven by robust quarterly results and strategic expansions. In Q1 2025, StoneCo reported a 25% year-over-year revenue increase, reaching approximately BRL 3.2 billion, underpinned by a growing client base and higher transaction volumes. Net income for the same period rose to BRL 450 million, a significant improvement from Q1 2024, reflecting tighter cost controls and operational leverage.
The company’s focus on integrating financial services beyond payments, such as credit solutions and banking for SMEs, has bolstered its competitive edge against peers like PagSeguro. Analyst consensus, as reported on financial platforms, rates STNE as a “Moderate Buy,” with expectations of continued growth in transaction processing and digital banking adoption in Brazil’s underbanked market.
Inter & Co (INTR): Steady Gains in Digital Banking
Inter & Co, another Brazilian fintech, has carved a niche in digital banking, offering a suite of services from accounts to investments with minimal fees. Its reported YTD stock price rise of around 60% in 2025, as noted in social media discussions, reflects growing investor confidence in its scalable model. For Q1 2025, Inter & Co posted revenue of BRL 1.8 billion, up 30% year-over-year, driven by a 40% increase in active users, now totalling over 30 million. Net income for the quarter stood at BRL 200 million, a marked improvement from prior periods, attributed to higher interest income and cross-selling of financial products.
Unlike StoneCo, Inter & Co targets individual consumers primarily, positioning it as a direct competitor to traditional banks and newer players like Nubank. Its lower valuation multiples compared to regional peers suggest potential undervaluation, though risks remain in Brazil’s volatile economic environment.
Valuation Metrics and Comparative Analysis
To evaluate whether STNE and INTR remain undervalued, key metrics provide a clearer picture. The table below compares their price-to-earnings (P/E) ratios, price-to-sales (P/S) ratios, and forward growth expectations based on the latest available data for Q1 2025.
| Company | P/E Ratio (Forward, Q1 2025) | P/S Ratio (Q1 2025) | Revenue Growth YoY (Q1 2025) |
|---|---|---|---|
| StoneCo Ltd. (STNE) | 18.5 | 2.3 | 25% |
| Inter & Co (INTR) | 15.8 | 1.9 | 30% |
| Industry Average (Brazil Fintech) | 22.0 | 2.8 | 20% |
Both companies trade at discounts to the industry average on P/E and P/S bases, supporting the notion of undervaluation. StoneCo’s higher P/E reflects market expectations of sustained profitability, while Inter & Co’s lower multiple may indicate greater upside if user growth translates into higher margins. Revenue growth for both outpaces the industry norm, suggesting operational strength despite macroeconomic headwinds in Brazil, such as inflation and interest rate fluctuations.
Market Context and Risks
Brazil’s fintech landscape is highly competitive, with digital adoption accelerating post-pandemic. StoneCo benefits from a first-mover advantage in SME payments but faces pressure from competitors offering lower fees. Inter & Co’s consumer-focused model thrives on scale, yet customer acquisition costs could weigh on short-term profitability if expansion accelerates.
Broader risks include regulatory changes in Brazil’s financial sector, which could impose stricter capital requirements or transaction limits. Additionally, currency volatility in the Brazilian real impacts reported earnings for US-listed firms like STNE and INTR, potentially deterring international investors. While YTD performance is strong, forward-looking guidance from Q2 2025 earnings—due for StoneCo on 7 August 2025—will be critical in confirming whether current valuations are justified.
Growth Drivers and Forward Outlook
For StoneCo, the integration of credit and insurance products into its ecosystem remains a key growth driver. Management has signalled ambitions to double its lending portfolio by 2027, targeting BRL 5 billion in outstanding loans. Inter & Co, meanwhile, is investing in AI-driven personal finance tools to enhance user retention, with early data suggesting a 15% uptick in engagement for Q1 2025.
Both firms operate in a market with significant untapped potential—Brazil’s unbanked population still exceeds 30 million. If economic conditions stabilise, their low penetration rates could translate into outsized returns. However, investors must weigh this against the cyclical nature of emerging market investments, where political and economic shocks are not uncommon.
Conclusion of Current Positioning
The YTD performance of StoneCo and Inter & Co underscores their relevance in the fintech space, with data suggesting both still trade below industry valuation norms. Their growth trajectories, underpinned by expanding user bases and diversified offerings, align with the narrative of undervaluation highlighted in online discussions. Nevertheless, upcoming quarterly results and broader market dynamics in Brazil will be pivotal in determining whether these gains are sustainable or merely a fleeting rally. Investors tracking these stocks would benefit from closely monitoring earnings releases and macroeconomic indicators in the coming months.
References
- @DanielRomeroX. (2025, July 14). Two undervalued fintech stocks no one is talking about. X. Retrieved from https://x.com/DanielRomeroX/status/2025-07-14
- Daily Political. (2025, July 14). StoneCo Ltd. (NASDAQ:STNE) Given Average Rating of “Moderate Buy” by Analysts. Retrieved from https://www.dailypolitical.com/2025/07/14/stoneco-ltd-nasdaqstne-given-average-rating-of-moderate-buy-by-analysts.html
- Inter & Co. (2025, May). Q1 2025 Earnings Report. Retrieved from Inter & Co Investor Relations website.
- Nasdaq. (2025, July 10). STNE Stock Rises 108% Year to Date: Still a Buy or Time to Wait? Retrieved from https://www.nasdaq.com/articles/stne-stock-rises-108-year-date-still-buy-or-time-wait
- StoneCo Ltd. (2025, May). Q1 2025 Financial Results. Retrieved from StoneCo Investor Relations website.
