XP Inc. (NASDAQ:XP) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

There's been a notable change in appetite for XP Inc. (NASDAQ:XP) shares in the week since its first-quarter report, with the stock down 18% to US$17.99. It was an okay result overall, with revenues coming in at R$4.1b, roughly what the analysts had been expecting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for XP

Taking into account the latest results, the consensus forecast from XP's seven analysts is for revenues of R$17.1b in 2024. This reflects a solid 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 4.2% to R$8.35. In the lead-up to this report, the analysts had been modelling revenues of R$17.3b and earnings per share (EPS) of R$8.51 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of US$28.46, showing that the business is executing well and in line with expectations. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic XP analyst has a price target of US$32.69 per share, while the most pessimistic values it at US$21.80. This is a very narrow spread of estimates, implying either that XP is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting XP's growth to accelerate, with the forecast 18% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect XP to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on XP. Long-term earnings power is much more important than next year's profits. We have forecasts for XP going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for XP that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.