StoneX's High ROE Supports the Bull Case: Is It Sustainable?

SNEX's 19.31% ROE tops its 15% long-term target, but rising costs, credit losses and margin pressure could test whether those returns endure.

Swayta Shah

2 min read

StoneX Group’s SNEX strong return on equity (ROE) underscores the company’s improving earnings power and efficient capital deployment. Its trailing-12-month ROE was 19.31% through the second quarter of fiscal 2026, substantially above the industry average of 5.63%. The metric also surpassed management’s long-term ROE target of 15%, strengthening the investment case for the diversified financial-services provider.

Several factors have supported StoneX’s solid returns. Heightened market volatility has increased client activity across derivatives, securities, commodities and foreign exchange. The company has also benefited from acquisitions that expanded its product capabilities, geographic reach and customer base. Meanwhile, average client equity and money-market or sweep balances reached nearly $15.2 billion as of March 31, 2026, generating recurring interest and fee income alongside transaction-based revenues.

However, sustaining the current ROE level may become challenging for SNEX. Total fixed compensation and other expenses have been steadily rising, partly reflecting costs associated with recent acquisitions. Net bad-debt expenses are also increasing, indicating greater credit-loss exposure.

Additionally, declining rate per million in the Payments business and variability in Securities revenue capture could pressure margins. StoneX’s strong trading volumes, acquisition synergies and growing client balances remain supportive. Yet, controlling expenses, limiting credit losses and stabilizing spreads will be crucial for keeping ROE above management’s long-term target.

How are StoneX’s Peers Performing in Terms of Profitability?

Two close peers of StoneX are Robinhood Markets HOOD and BGC Group BGC.

Robinhood’s ROE is 5.37% at present, below SNEX’s. Returns are supported by higher trading activity, expanding platform assets, strong net deposits, margin lending, interest-earning assets and growing event-contract revenues. Continued customer growth and product diversification should further aid Robinhood’s profitability.

BGC Group’s ROE is strong at 55.32%, far above StoneX. BGC Group’s returns are supported by robust cash-flow growth, higher projected sales and earnings growth, and an asset-light brokerage model that benefits from elevated trading activity and market volatility.

SNEX’s Price Performance, Valuation & Estimate Analysis

So far this year, StoneX shares have soared 75.7% compared with the Zacks Investment Bank industry’s growth of 10.8%.

YTD Price Performance

Image Source: Zacks Investment Research

SNEX shares are currently trading at a premium to the industry. The company has a 12-month trailing price-to-book (P/B) of 3.27X compared with the industry average of 2.67X.

P/B TTM

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for StoneX’s fiscal 2026 earnings suggests a year-over-year jump of 52.7%. Earnings are expected to rise 4.2% for fiscal 2027. In the past month, earnings estimates for fiscal 2026 and fiscal 2027 have been unchanged at $4.00 and $4.17 per share, respectively.

Earnings Estimates

Image Source: Zacks Investment Research

SNEX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Free: See Our Top Stock And 4 Runners Up

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report