New York, March 18, 2026 – StoneX Group Inc. (NASDAQ: SNEX) reported record fiscal 2025 results with Distributable Earnings of $416.8 million. The McGrew Framework Model computes a McGrew Growth 20-year intrinsic value of $210 per share and a Buffett Inspired 10-year intrinsic value of $176 per share. The 50% margin-of-safety prices are $105 and $88 per share respectively. At today’s closing price of $104.49, SNEX represents a Screaming Buy opportunity with expected pre-tax annualized IRRs of 14.9–16.6% at exit under base assumptions.
Key Takeaways
- McGrew Growth intrinsic value reaches $210 per share; Buffett Inspired value is $176 per share.
- 50% margin-of-safety prices of $105 and $88 versus current $104.49 signal strong upside.
- Distributable Earnings base of $416.8 million grows at 10.2% in Year 1 as a combination of analysts opinions, tapering to 2.5% terminal rate.
- Projected shares held constant at 52.36 million per operational guardrail; no net-debt adjustment for financial-services structure.
- Expected IRRs at exit range 14.9–16.6% (McGrew) across PE multiples of 12x–24x at current price.
- Strong ROE and client-asset growth support sustainable cash generation.
Valuation Snapshot
The McGrew Framework Model produces two complementary discounted-distributable-earnings valuations for StoneX Group Inc. The McGrew Growth 20-year horizon delivers $210 per share. The Buffett Inspired 10-year model yields $176 per share. Both employ the identical base-year Distributable Earnings of $416.8 million, discount rate of 8.88%, and 2.5% terminal growth.
Present values maintain per-share consistency throughout: aggregate terminal values are divided by projected terminal-year shares before discounting and addition to explicit-period sums. No net-debt subtraction applies given the financial-services classification. At $104.49, the stock trades at a 50% discount to the McGrew value and 41% discount to the Buffett value. Sensitivity analysis confirms robustness. Expected IRRs at exit reinforce the margin of safety and return potential.
Intrinsic Value Results Table
| Ticker | Valuation Method | Value Per Share | 50% Margin of Safety | Last Closing Price | Action |
|---|---|---|---|---|---|
| SNEX | McGrew Growth (20yr) | $210 | $105 | $104.49 | Screaming Buy |
| SNEX | Buffett Inspired (10yr) | $176 | $88 | $104.49 | Buy |
Understanding the Valuation Methodology
The McGrew Framework strictly follows Distributable Earnings for financial services: reported net income plus non-cash charges minus estimated regulatory-capital increase for growth. Calculations maintain full per-share consistency from base year forward.
The McGrew Growth model projects 20 explicit years with phased growth. The Buffett Inspired model uses Year 1 rate then linear fade to 2.5% by Year 10. Terminal value equals next-year earnings divided by (discount rate minus 2.5%), converted to per-share, discounted, and added only after explicit per-share summation.
Warren Buffett defined intrinsic value as the discounted value of the cash that can be taken out of a business during its remaining life. This framework embodies that principle. Buffett also emphasized the margin of safety: purchase substantially below intrinsic value.
Growth and Discount Rate Assumptions
The initial growth rate of 10.2% is used as a combination of analysts opinions. Historical CAGR is approximately 17%. The terminal growth rate is fixed at 2.5%. The discount rate equals the current 30-year U.S. Treasury yield of 4.88% plus a 4% equity risk premium, yielding 8.88%. Projected shares remain constant at 52.36 million per the operational-share-change guardrail.
A discount rate represents the opportunity cost of capital and the required return to compensate for time and risk. The terminal value captures perpetual growth beyond the explicit horizon and is included to avoid truncating the cash-flow stream.
Fundamental Analysis and Debt-Adjusted Returns
StoneX exhibits strong returns on capital with trailing three-year average ROE of approximately 17% and latest TTM at 16.9%. ROIC and ROCE remain robust. Debt-adjusted ROE highlights unlevered earning power.
Financial leverage is acceptable. Debt-to-equity ratio is moderate. Cash and segregated assets exceed $11 billion. The ultra-conservative cash ratio exceeds 1.0x. Interest coverage is strong. Overall leverage classification is low-to-acceptable, supporting flexibility and sustainability of returns.
Action Recommendation
SNEX is a Screaming Buy under the McGrew Growth model and a Buy under the Buffett Inspired model. The McGrew intrinsic value exceeds the current price by more than 75%. The 50% margin-of-safety price remains attractive. Elevated IRRs confirm compelling risk-adjusted returns.
Company Profile & Sector Classification
StoneX Group Inc. operates a global financial ecosystem connecting clients to markets through execution, clearing, and advisory services in commodities, foreign exchange, securities, and physical contracts. Headquartered in New York, the company serves institutional, commercial, and retail clients worldwide. Sector classification is Financial Services (brokerage). It is not an insurance company, confirming use of Distributable Earnings.
DAROE Explanation
Debt-Adjusted Return on Equity normalizes reported ROE for leverage effects, isolating the company’s ability to generate returns on equity capital independent of debt financing. It provides a clearer view of core operating efficiency. For StoneX, strong DAROE underscores sustainable cash generation capacity.
Last Quarterly Earnings Results
Fiscal 2026 first-quarter results set records with net operating revenues of $724.4 million up 47% year-over-year. Net income totaled $139.0 million up 63%. Diluted EPS was $2.50 up 48%. ROE hit 22.5%. Broad strength across segments directly supports the base-year inputs and projections.
Management and Analyst’s Outlook
Management highlighted record performance and client-asset growth exceeding 86% year-over-year. Forward guidance emphasizes continued expansion. Analysts align with near-term growth expectations consistent with the 10.2% initial rate used here.
Recent News & Qualitative Considerations
Recent developments include integration of acquisitions and the three-for-two stock split. The company’s moat stems from its unique ecosystem serving as an alternative to traditional banks. Competitive landscape features established brokers. Sector dynamics favor volatility-driven volumes and rising client assets. Broader trends support sustained growth.
Share Count & Capital Structure
Fully diluted shares outstanding stand at 52.36 million post-split adjustments. Projected annual share change is 0% per the operational guardrail. Shares are held constant across all projection horizons.
Net Debt / Net Cash Calculation
Adjusted net debt for financial services is floored at zero. Cash and segregated assets substantially exceed debt. No subtraction applies in the valuation per model guidelines.
Preferred Stock Status
StoneX maintains a simple capital structure with no preferred shares outstanding.
Base Year Determination & Data Sourcing
Base Year is fiscal 2025 ended September 30, 2025, confirmed via 10-K filed November 2025 and earnings release. Protocol prioritizes the most recent completed fiscal year. All data double-sourced from SEC filings and investor relations.
Owner Earnings / Distributable Earnings Calculation
Reported net income $305.9 million plus D&A $67.5 million plus SBC $49.0 million minus estimated regulatory-capital increase of $5.6 million equals $416.8 million Distributable Earnings. Reconciliation verified against cash-flow statement.
CapEx Normalization Analysis
CapEx of $65.4 million approximates D&A levels. Normalization is not material for financial-services Distributable Earnings.
SBC Adjustment Explanation
Stock-based compensation of $49.0 million is added back as a non-cash charge. Dilution effects are captured in the share-count guardrail. The adjustment ensures sustainable cash available to owners.
Growth Rate Inputs
The initial growth rate of 10.2% is used as a combination of analysts opinions. Historical CAGR is approximately 17%. Phased application follows model logic.
Discount Rate Derivation
30-year U.S. Treasury yield of 4.88% plus 4% equity risk premium produces 8.88%. The rate reflects opportunity cost and risk.
McGrew Growth Model Projections: 20 Year Horizon
| Year | Owner Earnings Total ($M) | Growth Rate Applied | Projected Shares (M) | Per-Share Owner Earnings | Present Value |
|---|---|---|---|---|---|
| 1 | 459.31 | 10.2% | 52.36 | 8.77 | 8.06 |
| 2 | 505.23 | 10.0% | 52.36 | 9.65 | 8.14 |
| 3 | 553.10 | 9.5% | 52.36 | 10.56 | 8.18 |
| 4 | 602.63 | 9.0% | 52.36 | 11.51 | 8.19 |
| 5 | 653.47 | 8.4% | 52.36 | 12.48 | 8.16 |
| 6 | 705.19 | 7.9% | 52.36 | 13.47 | 8.08 |
| 7 | 757.34 | 7.4% | 52.36 | 14.46 | 7.97 |
| 8 | 809.41 | 6.9% | 52.36 | 15.46 | 7.83 |
| 9 | 860.84 | 6.4% | 52.36 | 16.44 | 7.65 |
| 10 | 911.07 | 5.8% | 52.36 | 17.40 | 7.43 |
| 11 | 959.48 | 5.3% | 52.36 | 18.32 | 7.19 |
| 12 | 1005.48 | 4.8% | 52.36 | 19.20 | 6.92 |
| 13 | 1048.45 | 4.3% | 52.36 | 20.02 | 6.63 |
| 14 | 1087.81 | 3.8% | 52.36 | 20.78 | 6.31 |
| 15 | 1122.98 | 3.2% | 52.36 | 21.45 | 5.99 |
| 16 | 1157.64 | 3.1% | 52.36 | 22.11 | 5.67 |
| 17 | 1191.68 | 2.9% | 52.36 | 22.76 | 5.36 |
| 18 | 1224.97 | 2.8% | 52.36 | 23.40 | 5.06 |
| 19 | 1257.39 | 2.6% | 52.36 | 24.01 | 4.77 |
| 20 | 1288.82 | 2.5% | 52.36 | 24.61 | 4.49 |
Buffett Inspired Model Projections: 10 Year Horizon
| Year | Owner Earnings Total ($M) | Growth Rate Applied | Projected Shares (M) | Per-Share Owner Earnings | Present Value |
|---|---|---|---|---|---|
| 1 | 459.31 | 10.2% | 52.36 | 8.77 | 8.06 |
| 2 | 502.23 | 9.3% | 52.36 | 9.59 | 8.09 |
| 3 | 544.87 | 8.5% | 52.36 | 10.41 | 8.06 |
| 4 | 586.46 | 7.6% | 52.36 | 11.20 | 7.97 |
| 5 | 626.21 | 6.8% | 52.36 | 11.96 | 7.82 |
| 6 | 663.29 | 5.9% | 52.36 | 12.67 | 7.60 |
| 7 | 696.90 | 5.1% | 52.36 | 13.31 | 7.34 |
| 8 | 726.25 | 4.2% | 52.36 | 13.87 | 7.02 |
| 9 | 750.62 | 3.4% | 52.36 | 14.34 | 6.67 |
| 10 | 769.38 | 2.5% | 52.36 | 14.69 | 6.28 |
Internal Rate of Return at Exit Sensitivity Analysis
The IRR at Exit Sensitivity Table quantifies expected pre-tax annualized returns assuming purchase at current or MOS price and sale at horizon-end at specified PE multiples. McGrew 20-year IRRs range 14.9–16.6% at current price. Buffett 10-year IRRs are comparably attractive. These returns highlight the margin of safety and long-term potential.
IRR at Exit Sensitivity Table
| PE Multiple at Exit | McGrew 20yr IRR @ Current Price | McGrew 20yr IRR @ MOS Price | Buffett 10yr IRR @ Current Price | Buffett 10yr IRR @ MOS Price |
|---|---|---|---|---|
| 12x | 14.9% | 9.5% | 12.5% | 7.2% |
| 18x | 15.8% | 10.3% | 13.8% | 8.4% |
| 24x | 16.6% | 11.0% | 14.9% | 9.3% |
Sensitivity Table
Varying initial growth ±5% or discount ±1% yields McGrew values $170–$260 and Buffett $140–$210, all supportive of current price levels.
Key Financial Metrics Summary Table
| Metric | Trailing 3-Year Average | Latest Year/TTM |
|---|---|---|
| Market Capitalization ($B) | – | ~5.5 |
| Forward PE | – | ~12x |
| ROE (%) | 17.0 | 16.9 |
| ROIC (%) | Strong | Strong |
| Debt-to-Equity (X) | Moderate | Moderate |
| Ultra-Conservative Cash Ratio | >1.0x | >1.0x |
Error Log & Data Flags
Regulatory-capital increase estimated at 12.5% of NI growth. Shares held constant per guardrail. All reconciliations within 1%. Primary sources double-sourced with no material discrepancies.
Equity Research is powered by the complex and proprietary McGrew Framework Quantitative Financial Model with the assistance of xAI & Gemini.
Data Sourcing
All quantitative inputs prioritized SEC 10-K (filed November 2025), Q1 FY2026 earnings release (February 2026), and investor-relations materials. 30-year Treasury yield cross-verified via official sources. Growth rate of 10.2% applied per user instruction as combination of analysts opinions. Code execution performed all projections, discounting, and brentq IRR solving with full precision.
Key Citations
SEC 10-K FY2025, earnings releases, Treasury data.