NasdaqGS:XP

Stock Analysis Report

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Market Cap

US$23.6b

Last Updated

2021/08/03 23:30 UTC

Data Sources

Company Financials +

Executive Summary

XP Inc. provides financial products and services in Brazil. More Details


Snowflake Analysis

Exceptional growth potential with solid track record.


Similar Companies

Share Price & News

How has XP's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: XP is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: XP's weekly volatility (6%) has been stable over the past year.


Market Performance


7 Day Return

4.3%

XP

1.3%

US Capital Markets

0.9%

US Market


1 Year Return

-11.6%

XP

58.4%

US Capital Markets

34.7%

US Market

Return vs Industry: XP underperformed the US Capital Markets industry which returned 57.6% over the past year.

Return vs Market: XP underperformed the US Market which returned 34.4% over the past year.


Shareholder returns

XPIndustryMarket
7 Day4.3%1.3%0.9%
30 Day-0.3%0.9%0.2%
90 Day-1.1%4.7%4.7%
1 Year-11.6%-11.6%61.7%58.4%36.8%34.7%
3 Yearn/a76.5%63.8%62.5%52.4%
5 Yearn/a171.4%138.8%123.1%98.4%

Long-Term Price Volatility Vs. Market

How volatile is XP's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is XP undervalued compared to its fair value and its price relative to the market?

50.95x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: XP ($42.3) is trading above our estimate of fair value ($16.17)

Significantly Below Fair Value: XP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: XP is poor value based on its PE Ratio (50.9x) compared to the US Capital Markets industry average (12.9x).

PE vs Market: XP is poor value based on its PE Ratio (50.9x) compared to the US market (17.9x).


Price to Earnings Growth Ratio

PEG Ratio: XP is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: XP is good value based on its PB Ratio (10.7x) compared to the US Capital Markets industry average (61.4x).


Future Growth

How is XP forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

24.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: XP's forecast earnings growth (24.1% per year) is above the savings rate (2%).

Earnings vs Market: XP's earnings (24.1% per year) are forecast to grow faster than the US market (15% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: XP's revenue (22.4% per year) is forecast to grow faster than the US market (9.2% per year).

High Growth Revenue: XP's revenue (22.4% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: XP's Return on Equity is forecast to be high in 3 years time (27.8%)


Past Performance

How has XP performed over the past 5 years?

41.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: XP has high quality earnings.

Growing Profit Margin: XP's current net profit margins (26.7%) are higher than last year (21.4%).


Past Earnings Growth Analysis

Earnings Trend: XP's earnings have grown significantly by 41.9% per year over the past 5 years.

Accelerating Growth: XP's earnings growth over the past year (90.3%) exceeds its 5-year average (41.9% per year).

Earnings vs Industry: XP earnings growth over the past year (90.3%) exceeded the Capital Markets industry 58.3%.


Return on Equity

High ROE: Whilst XP's Return on Equity (20.93%) is high, this metric is skewed due to their high level of debt.


Financial Health

How is XP's financial position?


Financial Position Analysis

Short Term Liabilities: XP's short term assets (R$88.5B) exceed its short term liabilities (R$84.5B).

Long Term Liabilities: XP's short term assets (R$88.5B) exceed its long term liabilities (R$25.7B).


Debt to Equity History and Analysis

Debt Level: XP's debt to equity ratio (453.3%) is considered high.

Reducing Debt: XP's debt to equity ratio has increased from 115% to 453.3% over the past 5 years.

Debt Coverage: XP's debt is not well covered by operating cash flow (3.8%).

Interest Coverage: XP's interest payments on its debt are well covered by EBIT (74.3x coverage).


Balance Sheet


Dividend

What is XP current dividend yield, its reliability and sustainability?

0.93%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate XP's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate XP's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if XP's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if XP's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of XP's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Thiago Maffra

0.25

Tenure

Mr. Thiago Maffra serves as Chief Technology Officer at XP Inc. and serves as its Chief Executive Officer since May 12, 2021. He served as Executive Director Of Technology at XP Inc. until May 12, 2021. Mr...


Leadership Team

Experienced Management: XP's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

Experienced Board: XP's board of directors are not considered experienced ( 1.8 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

XP Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: XP Inc.
  • Ticker: XP
  • Exchange: NasdaqGS
  • Founded: 2001
  • Industry: Investment Banking and Brokerage
  • Sector: Diversified Financials
  • Market Cap: US$23.648b
  • Shares outstanding: 559.06m
  • Website: https://www.xpinc.com

Number of Employees


Location

  • XP Inc.
  • Av. Chedid Jafet, 75
  • 30th Floor
  • São Paulo
  • São Paulo
  • 04551-065
  • Brazil

Listings


Biography

XP Inc. provides financial products and services in Brazil. It offers securities brokerage, private pension plans, commercial, and investment banking products, such as loan operations and transactions in t...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/08/03 23:30
End of Day Share Price2021/08/03 00:00
Earnings2021/03/31
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.