I think StoneX Group is an underfollowed compounder trading at an attractive valuation. Here’s my thesis.

I think StoneX Group is an underfollowed compounder with attractive upside.

StoneX is a financial services and capital markets platform focused on middle-market and institutional clients that are often overlooked by bulge bracket banks.

What I like is the business model.

SNEX generates revenue from:

* Transaction spreads
* Fee income
* Interest earned on client float

That creates multiple earnings levers and gives the business some resilience across different market environments.

In fact, parts of the business benefit from higher market volatility and increased trading activity.

A few metrics:

* Market cap: $11B
* Forward P/E: 22.5x
* Revenue growth (YoY): 23.6%
* Forward EPS growth: 20.9%
* ROE: 19.5%
* PEG: 0.57
* Insider ownership: 9.5%

The valuation is what stands out to me.

22.5x earnings might look expensive for a financial business, but with 20%+ forward EPS growth and a PEG below 0.6, I think the market may be underestimating future earnings power.

A major catalyst is the R.J. O’Brien acquisition, which expands the client base, strengthens market positioning, and offers meaningful cross-sell opportunities.

Management expects \~$100M in synergies within 24 months.

Bear case is fairly obvious:

* Lower volatility
* Lower trading volumes
* Rate headwinds
* Integration risk

But overall I think this is an underfollowed, high-quality business with multiple growth drivers.

Curious if anyone here follows SNEX or has a different view?