StoneCo slashes 2026 outlook and scraps 2027 targets as credit losses mount

A major financial technology holding in many global retail portfolios is scaling back its growth ambitions as high borrowing costs and rising default rates squeeze its bottom line. Investors holding shares in foreign payment processors are seeing firsthand how persistent macroeconomic pressures can abruptly derail multi-year corporate targets.

On November 12, 2026, StoneCo Ltd. reported that its adjusted net income for the third quarter of 2026 fell 15.5% year-over-year to R$542.1 million. StoneCo is a prominent Brazilian fintech company that provides payment processing, banking, and software solutions to millions of small and medium-sized merchants across Latin America's largest economy.

The company's adjusted gross profit for the quarter fell 8.0% year-over-year to R$1.48 billion, even as total revenue and income managed a modest 3.3% increase to R$3.69 billion. The profitability squeeze was driven primarily by mounting credit quality concerns. As StoneCo aggressively expanded its credit portfolio—which grew 78% year-over-year to R$4.1 billion—it was forced to set aside significantly larger provisions for loan losses to protect against defaults in a high-interest-rate environment.

The Macro Squeeze and Scrapped Targets

The operational headwinds prompted management to issue a steep revision to its future expectations. StoneCo lowered its full-year 2026 adjusted basic earnings per share (EPS) guidance to a range of R$9.1 to R$9.5, down sharply from its previous projection of R$10.8 to R$11.4. Additionally, the company lowered its 2026 adjusted gross profit outlook to R$6.1–R$6.2 billion, down from the R$6.6–R$7.0 billion range previously communicated to the market.

More concerning for long-term investors, StoneCo completely withdrew its financial targets for 2027. Management cited a "persistently tough macroeconomic environment" in Brazil, characterized by severe interest rate volatility. In its earnings presentation, the company noted that post-election shifts in the Brazilian domestic yield curve of approximately 250 basis points created too much uncertainty to maintain reliable multi-year forecasts. StoneCo estimates that every 100-basis-point move in local interest rates impacts its profitability by R$200 million to R$250 million.

The company plans to re-evaluate whether to provide updated targets for 2027 when it reports its full-year 2026 financial results. Until then, investors will have to gauge the fintech's recovery quarter-by-quarter, watching closely to see if its credit provisions stabilize and if its merchant client retention holds up against aggressive local competition.

In your brokerage app

StoneCo Ltd. is listed on the Nasdaq under the ticker STNE. Because of its prominent role in the Latin American digital payments landscape, the company is also a common holding in broad emerging markets exchange-traded funds (ETFs) and specialized fintech-focused funds.