StoneX Group Inc. (SNEX): what the price assumes

In the published model solve dated 2026-Q2, anchored at $75.89, StoneX Group Inc. (SNEX) is priced for +5.9% earnings growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/SNEX

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Solve inputs: computed at a 9.7% cost of equity with 4% terminal growth over a 5-year stage, on the latest fiscal year's GAAP earnings base; each 1pp of cost of equity moves the implied earnings growth ~4.1pp.

How unusual the bet is: within-range

Valuation X-Ray

The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 4.7%); the inversion above states its own rate.

Per-Model Detail (n=11)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Operating profit is negative or near zero and the company has no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so years-to-repay cannot be computed honestly.

Operating profit is negative or near zero and there is no demonstrated through-cycle (mid-cycle) operating margin to normalize against, so interest coverage cannot be computed honestly.

Bullet Takeaways

• StoneX became the largest non-bank futures commission merchant in the United States through the R.J. O'Brien acquisition, which added $35 million of pre-tax net income in the March quarter with synergies tracking toward a $50 million target, on top of a Commercial franchise its 10-K says hedges clients' "future production" across physical and financial markets (accession 0000913760-25-000196).
• The price is the risk: at roughly 31 times GAAP earnings, the very top of the fee-financial group, the quote implies about 16.9 percent annual fee-earnings growth that only about a third of comparably fast-growing fee firms have sustained five years, while the share count grows almost 5 percent a year as deal currency.
• Watch the fiscal third-quarter report in early August 2026 for the R.J. O'Brien synergy run rate against the $45 million fiscal year-end goal, plus regulatory progress on the proposed £241 million CAB Payments acquisition.

Bull Case

The bear case writes itself, so take it first: StoneX is a leveraged financial intermediary that clears and finances client trades across commodities, futures, FX, and payments, and its own 10-K admits such transactions "may expose us to significant credit risk in the event margin requirements are not sufficient to fully cover losses which clients may incur" (accession 0000913760-25-000196). A firm like this can look brilliant right up until a client blowup. Now look at what the data actually says about that fear. The company holds $397.5 million of net cash with $2.1 billion of liquid assets against $1.7 billion of gross debt, controls its client exposure through margin deposits compliant with clearing organization requirements per the same filing, and has just posted the two strongest quarters in its history while integrating its largest-ever acquisition. The fear is structural to the industry; the balance sheet and the record say this operator manages it.

The growth engine is acquisition plus attachment. Fiscal second-quarter net income reached $174.3 million, up 143 percent year over year, with GAAP diluted EPS of $2.07, up 120 percent, on broad strength across every segment. R.J. O'Brien, the acquisition that made StoneX the largest non-bank futures commission merchant in the United States, contributed $35 million of pre-tax net income in the quarter excluding intangible amortization, with synergies running at about a $32 million annualized rate exiting the quarter, on a path management guides toward $45 million by fiscal year-end and $50 million in 2027. The pipeline keeps feeding: the proposed £241 million CAB Payments acquisition and the WCS International banknotes purchase both extend the Payments segment, and a new securitization and capital markets platform launched in March.

What the market may still underrate is the stickiness of the franchise. The 10-K describes the Commercial segment as helping clients protect "the value of their future production" through hedging, layered with market intelligence, physical trading, commodity financing and logistics, capabilities the filing argues "differentiates us from our competitors and maximizes the opportunity to retain our clients" (accession 0000913760-25-000196). A grain elevator or metals merchant that clears, finances, and hedges through one counterparty does not casually leave. On trailing earnings the stock still screens reasonably: the earnings-power and peer-multiple reads sit above the price, and the forward-growth methods roughly double it. The dilution from acquisition currency, with the share count up almost 5 percent a year, is the real cost of the strategy, and the two record quarters just demonstrated the earnings that dilution bought.

Bear Case

The price now depends on a specific story continuing: fee earnings compounding around 16.9 percent a year, which is what today's roughly 31 times GAAP earnings implies for a capital-light financial at a 9.8 percent cost of equity. Name the fragile assumptions one at a time. First, that the acquisition engine keeps delivering: the R.J. O'Brien synergy path ($32 million annualized exiting the March quarter, $45 million by fiscal year-end, $50 million in 2027) is management's own schedule, and integration of the largest non-bank FCM franchise in the country is precisely the kind of project that finds surprises. Second, that volatility-driven trading revenue is a growth trend rather than a regime: the record quarters landed amid unusually active markets, and the firm's own filing says the "commodity risk management industry is very competitive and we expect competition to continue to intensify", naming large diversified financial institutions among the rivals (accession 0000913760-25-000196). Third, that nothing in the credit chain breaks while all of this compounds.

That third assumption deserves the most respect, because the balance sheet is a clearing firm's balance sheet. The 10-K acknowledges "significant credit risk in the event margin requirements are not sufficient to fully cover losses" (accession 0000913760-25-000196), and the scale of client-linked balances has exploded with the growth, with amounts payable to broker-dealers, clearing organizations and counterparties more than doubling year over year to $6.34 billion as of September 30, 2025 per the filing's own disclosure. Bigger flow means bigger fee capture and bigger tail exposure at once; the same trade that produced 143 percent net income growth produces the balance-sheet gross-up. GAAP operating income on the EDGAR trailing tally is actually negative at the whole-company line, a reminder that this P&L only makes sense read as a financial firm through net earnings, and that its earnings quality is interest-rate- and volume-sensitive rather than contractual.

The valuation now stands at the top of its class. The price-to-earnings sits at the very top of the fee-financial group, and historically only about a third of fee firms growing earnings this fast sustained the pace even five years. The stock's 39 percent one-month move after the May print means the market has already paid for the synergy schedule and a good chunk of the next acquisition. Dilution keeps running at almost 5 percent a year as deal currency. If markets go quiet, if a counterparty event forces a provision, or if the CAB Payments deal stumbles on regulatory review, the multiple has a long way down to the fee-financial median, and the earnings it capitalizes would be shrinking at the same time.

Valuation

StoneX is a fee business wearing a commodity firm's revenue line, so read the price off earnings, not sales. At $117.75 (July 10, 2026), the market pays about 31 times the latest fiscal year's GAAP earnings, a 3.3 percent earnings yield, which at a 9.8 percent cost of equity implies fee earnings growing about 16.9 percent a year over a five-year stage. Three references calibrate that bet: the pace is within what StoneX has itself delivered; the multiple sits at the very top of the fee-financial peer group; and only about 33 percent of fee firms growing this fast sustained it five years. The assumption is elevated, above what fundamentals comfortably support, though not outside the firm's own demonstrated range. Each percentage point of cost of equity moves the implied growth requirement by almost 5 points, so the corridor is wide.

The trailing lenses tell a friendlier story than that forward solve, and the two should be kept distinct. On trailing reads, the earnings-power and peer-multiple families sit about a third above the price, and the forward-growth methods land near double it, with only the asset-value family calling the stock expensive; the trailing lenses are reading the last twelve months' record earnings, while the inversion asks what the multiple demands of the future. Both can be true: the recent earnings explosion (fiscal Q2 net income of $174.3 million, up 143 percent, GAAP diluted EPS of $2.07) makes trailing multiples look modest, and the price still requires that growth to persist rather than mean-revert with market volatility. Note that whole-company GAAP operating income is negative on the EDGAR trailing tally, an artifact of how a clearing and physical-trading P&L consolidates; net earnings are the honest lens for this business.

The filing-sourced inputs under the fee stream are the segment architecture itself: an Institutional business providing exchange access, a Commercial business hedging clients' "future production", and risk-management consulting the company argues "differentiates us from our competitors" (accession 0000913760-25-000196), now extended by R.J. O'Brien's FCM book and a growing Payments arm. Solvency reads adequately for the model: $397.5 million of net cash, $2.1 billion of liquid assets, and margin-collateralized client exposure, though the share count has grown 4.8 percent a year as acquisition currency. What the buyer underwrites at 31 times is that StoneX keeps converting acquisitions and market flow into compounding fee earnings faster than the fee-financial group has typically managed.

Catalysts

Two record quarters set the tone for fiscal 2026. The December quarter delivered GAAP diluted EPS of $2.50, up 48 percent year over year despite an increased share count, on contributions from acquisitions and strength in institutional, commercial, global logistics and metals. The March quarter went further: net income of $174.3 million rose 143 percent with diluted EPS of $2.07, up 120 percent, and the stock jumped 13.6 percent on the print and roughly 39 percent over the following month.

The integration calendar is the main forward thread. R.J. O'Brien integration is guided to be substantially complete later this fiscal year, with synergies at about a $32 million annualized run rate exiting the March quarter, approaching $45 million by the end of fiscal 2026 and $50 million in 2027. The acquisition pipeline stays busy: the proposed £241 million acquisition of CAB Payments announced March 15, 2026, the completed purchase of UK banknotes firm WCS International on March 31, 2026, and the launch of a Securitization Banking, Lending & Capital Markets platform on March 26, 2026, all extend the Payments and capital markets footprint.

The fiscal third-quarter report, expected in early August 2026, carries the near-term reads: whether the volatility-assisted trading revenue of the first half persists, the synergy run rate's progress, and any update on CAB Payments regulatory clearance. Given the stock's sharp re-rating since May, the print is as much a test of the multiple as of the business.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• MS (MORGAN STANLEY)
• FY2025 10-K: …and diversified group of clients and customers, including corporations, governments, financial institutions and individuals. Additional information related to our business segments, respective clients, and products and services provided is included under "Management's Discussion and Analysis of Financial Condition…
• FY2025 10-K: …regulations applicable to certain global financial services institutions may prohibit us from engaging in certain transactions, impose more stringent capital and liquidity requirements, and increase costs, and can put us at a competitive disadvantage to competitors in certain businesses not subject to these same…
• GLXY (Galaxy Digital Inc.)
• FY2025 10-K: …to attract and retain customers and remain competitive with products and services offered by new 37 Table of Content competitors in the industry. Increased competition on the basis of any of these factors, including competition leading to fee reductions, may cause our AUM, revenue and earnings to decline and…
• FY2025 10-K: …useful to customers and achieve and maintain market acceptance; • our and our third-party service providers' ability to safeguard and manage our and our customers' funds and digital assets; • our reliance on technology provided by third parties which are out of our direct control; • the impact of acquisitions of or…
• APO (APOLLO GLOBAL MANAGEMENT, INC.)
• FY2025 10-K: …limit our ability to achieve our growth strategies and could materially and adversely affect our businesses, financial condition, results of operations, cash flows and prospects. We operate in highly competitive markets and compete with a large number of investment management and alternative asset management firms,…
• FY2025 10-K: …these areas may affect pricing, transaction terms, investment returns and our ability to deploy capital efficiently. In addition, our retirement services business faces significant competition from traditional insurers and reinsurers, asset managers and other financial institutions offering annuity, pension risk…
• BLK (BlackRock, Inc.)
• FY2025 10-K: Operating income and operating margin reflected higher revenue, driven by organic base fee growth, positive impact of markets and fees related to the HPS and GIP Transactions, as well as higher technology services and subscription revenue. Decreases in GAAP operating income and operating margin were driven by noncash…
• FY2025 10-K: …margins, tax rates, and the determination of the discount rates. • We evaluated the reasonableness of management's assumptions related to revenue basis points, projected AUM growth rates, operating margins, tax rates and discount rates by comparing management's projections to historical amounts, internal…
• SCHW (SCHWAB CHARLES CORP)
• FY2025 10-K: …higher margin and bank lending, higher cash and investments segregated, and lower balances of AFS and HTM securities. Client demand for margin and bank lending was strong during 2025, reflecting positive equity market performance and client engagement, as margin loan balances rebounded following market volatility in…
• FY2025 10-K: …assets and funding sources. Average margin loans and average short credits related to these client strategies totaled $2.8 billion for the year ended December 31, 2025. Interest revenue and expense related to these client strategies are presented in other interest revenue and other interest expense, respectively. The…
• KKR (KKR & Co. Inc.)
• FY2025 10-K: …our business operations professionals, may also perform certain functions in support of another headcount category. Our strategic holdings segment is supported by employees within the asset management headcount category. (2) Includes employees from certain of our majority owned and controlled subsidiaries such as…
• FY2025 10-K: …including focus and alignment of interest, duration of relationships, quality of services, and pricing and fund terms, including fees. We believe that competition for investment opportunities and capital markets transactions is based primarily on pricing, terms, and structure of a proposed transaction and certainty…
• LPLA (LPL Financial Holdings Inc.)
• FY2025 10-K: …to control the fee amounts charged to customers. Interest Income, net The Company earns interest income primarily from client margin loans, cash and equivalents segregated under federal or other regulations and advisor repayable loans and pays interest on certain client cash balances held in the client cash account.…
• FY2025 10-K: …in our efforts to attract and retain the advisors needed to achieve our growth objectives. More broadly, we are subject to competition in all aspects of our business from: • brokerage and investment advisory firms, including national and regional firms, as well as Independent RIAs; • asset management firms; •…
• BX (Blackstone Inc.)
• FY2025 10-K: …performance, transaction execution skills, access to capital, access to and retention of qualified personnel, reputation, range of products and services, innovation and price. We face competition in the pursuit of institutional and individual investors for our investment funds. Although over time many institutional…
• FY2025 10-K: …ultimately, our management fee revenue. Alternatively, in the face of poor fund performance, investors could demand lower fees or fee concessions for existing or future funds which would likewise decrease our revenue. Furthermore, our organizational documents do not limit our ability to enter into new lines or…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.