XP INC - CLASS A (XP) Stock Fundamental Analysis
NASDAQ:XP - Nasdaq - KYG982391099 - Common Stock - Currency: USD
XP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 233 industry peers in the Capital Markets industry. While XP is still in line with the averages on profitability rating, there are concerns on its financial health. An interesting combination arises when we look at growth and value: XP is growing strongly while it also seems undervalued.
1. Profitability
1.1 Basic Checks
In the past year XP was profitable.
In the past year XP had a positive cash flow from operations.
In the past 5 years XP has always been profitable.
XP had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
XP's Return On Assets of 1.35% is in line compared to the rest of the industry. XP outperforms 41.20% of its industry peers.
With an excellent Return On Equity value of 22.43%, XP belongs to the best of the industry, outperforming 90.99% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 1.35%, XP is doing worse than 69.96% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for XP is significantly below the industry average of 7.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.35% | ||
| ROE | 22.43% | ||
| ROIC | 1.35% |
ROA(3y)1.58%
ROA(5y)1.89%
ROE(3y)21.19%
ROE(5y)21.5%
ROIC(3y)1.49%
ROIC(5y)1.78%
1.3 Margins
XP has a Profit Margin of 27.24%. This is in the better half of the industry: XP outperforms 69.53% of its industry peers.
In the last couple of years the Profit Margin of XP has grown nicely.
XP has a Operating Margin of 33.99%. This is in the better half of the industry: XP outperforms 61.37% of its industry peers.
XP's Operating Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.99% | ||
| PM (TTM) | 27.24% | ||
| GM | N/A |
OM growth 3Y0.94%
OM growth 5Y1.22%
PM growth 3Y-3.75%
PM growth 5Y4.7%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
The number of shares outstanding for XP has been reduced compared to 1 year ago.
The number of shares outstanding for XP has been reduced compared to 5 years ago.
The debt/assets ratio for XP is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.08, we must say that XP is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.08, XP is doing worse than 75.97% of the companies in the same industry.
The Debt to FCF ratio of XP is 7.08, which is on the high side as it means it would take XP, 7.08 years of fcf income to pay off all of its debts.
XP has a Debt to FCF ratio (7.08) which is comparable to the rest of the industry.
A Debt/Equity ratio of 3.71 is on the high side and indicates that XP has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 3.71, XP is doing worse than 84.12% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.71 | ||
| Debt/FCF | 7.08 | ||
| Altman-Z | 0.08 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.18 indicates that XP may have some problems paying its short term obligations.
With a Current ratio value of 0.18, XP is not doing good in the industry: 90.99% of the companies in the same industry are doing better.
XP has a Quick Ratio of 0.18. This is a bad value and indicates that XP is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.18, XP is doing worse than 90.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.18 | ||
| Quick Ratio | 0.18 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.17% over the past year.
The Earnings Per Share has been growing by 33.24% on average over the past years. This is a very strong growth
XP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.78%.
Measured over the past years, XP shows a very strong growth in Revenue. The Revenue has been growing by 27.13% on average per year.
EPS 1Y (TTM)4.17%
EPS 3Y7.19%
EPS 5Y33.24%
EPS Q2Q%6.02%
Revenue 1Y (TTM)9.78%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%7.2%
3.2 Future
XP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 13.78% yearly.
Based on estimates for the next years, XP will show a quite strong growth in Revenue. The Revenue will grow by 13.27% on average per year.
EPS Next Y11.27%
EPS Next 2Y13.09%
EPS Next 3Y13.78%
EPS Next 5YN/A
Revenue Next Year9.2%
Revenue Next 2Y11.1%
Revenue Next 3Y11.37%
Revenue Next 5Y13.27%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 12.62, the valuation of XP can be described as correct.
Based on the Price/Earnings ratio, XP is valued a bit cheaper than 63.09% of the companies in the same industry.
XP is valuated cheaply when we compare the Price/Earnings ratio to 27.15, which is the current average of the S&P500 Index.
XP is valuated reasonably with a Price/Forward Earnings ratio of 10.04.
73.82% of the companies in the same industry are more expensive than XP, based on the Price/Forward Earnings ratio.
XP's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.60.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.62 | ||
| Fwd PE | 10.04 |
4.2 Price Multiples
XP's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. XP is cheaper than 88.41% of the companies in the same industry.
84.55% of the companies in the same industry are more expensive than XP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.07 | ||
| EV/EBITDA | 9.4 |
4.3 Compensation for Growth
XP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as XP's earnings are expected to grow with 13.78% in the coming years.
PEG (NY)1.12
PEG (5Y)0.38
EPS Next 2Y13.09%
EPS Next 3Y13.78%
5. Dividend
5.1 Amount
XP has a Yearly Dividend Yield of 13.59%, which is a nice return.
Compared to an average industry Dividend Yield of 8.00, XP pays a better dividend. On top of this XP pays more dividend than 87.55% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, XP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.59% |
5.2 History
XP is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
XP pays out 43.17% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP43.17%
EPS Next 2Y13.09%
EPS Next 3Y13.78%
20.2
+0.5 (+2.54%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners82.84%
Inst Owner Change1.31%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap10.67B
Analysts81.11
Price Target22.85 (13.12%)
Short Float %3.45%
Short Ratio1.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.59% |
Yearly Dividend0.69
Dividend Growth(5Y)N/A
DP43.17%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.08%
Min EPS beat(2)-1.63%
Max EPS beat(2)1.46%
EPS beat(4)2
Avg EPS beat(4)-0.25%
Min EPS beat(4)-2.46%
Max EPS beat(4)1.63%
EPS beat(8)6
Avg EPS beat(8)1.12%
EPS beat(12)9
Avg EPS beat(12)2.57%
EPS beat(16)13
Avg EPS beat(16)7.16%
Revenue beat(2)0
Avg Revenue beat(2)-4.39%
Min Revenue beat(2)-5.74%
Max Revenue beat(2)-3.04%
Revenue beat(4)0
Avg Revenue beat(4)-3.43%
Min Revenue beat(4)-5.74%
Max Revenue beat(4)-1.17%
Revenue beat(8)1
Avg Revenue beat(8)-2.12%
Revenue beat(12)2
Avg Revenue beat(12)-2.84%
Revenue beat(16)3
Avg Revenue beat(16)-3.29%
PT rev (1m)22.4%
PT rev (3m)26%
EPS NQ rev (1m)2.7%
EPS NQ rev (3m)3.86%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)-0.28%
Revenue NQ rev (1m)0.97%
Revenue NQ rev (3m)0.13%
Revenue NY rev (1m)-0.78%
Revenue NY rev (3m)-0.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.62 | ||
| Fwd PE | 10.04 | ||
| P/S | 3.37 | ||
| P/FCF | 5.07 | ||
| P/OCF | 4.91 | ||
| P/B | 2.78 | ||
| P/tB | 3.18 | ||
| EV/EBITDA | 9.4 |
EPS(TTM)1.6
EY7.92%
EPS(NY)2.01
Fwd EY9.96%
FCF(TTM)3.99
FCFY19.74%
OCF(TTM)4.11
OCFY20.35%
SpS5.99
BVpS7.27
TBVpS6.36
PEG (NY)1.12
PEG (5Y)0.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.35% | ||
| ROE | 22.43% | ||
| ROCE | 2.17% | ||
| ROIC | 1.35% | ||
| ROICexc | 1.38% | ||
| ROICexgc | 1.88% | ||
| OM | 33.99% | ||
| PM (TTM) | 27.24% | ||
| GM | N/A | ||
| FCFM | 66.59% |
ROA(3y)1.58%
ROA(5y)1.89%
ROE(3y)21.19%
ROE(5y)21.5%
ROIC(3y)1.49%
ROIC(5y)1.78%
ROICexc(3y)1.51%
ROICexc(5y)1.81%
ROICexgc(3y)1.95%
ROICexgc(5y)2.25%
ROCE(3y)2.48%
ROCE(5y)3.08%
ROICexcg growth 3Y-14.78%
ROICexcg growth 5Y-12.26%
ROICexc growth 3Y-16.98%
ROICexc growth 5Y-15.14%
OM growth 3Y0.94%
OM growth 5Y1.22%
PM growth 3Y-3.75%
PM growth 5Y4.7%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.71 | ||
| Debt/FCF | 7.08 | ||
| Debt/EBITDA | 12.67 | ||
| Cap/Depr | 131.23% | ||
| Cap/Sales | 2.06% | ||
| Interest Coverage | 17.35 | ||
| Cash Conversion | 193.06% | ||
| Profit Quality | 244.45% | ||
| Current Ratio | 0.18 | ||
| Quick Ratio | 0.18 | ||
| Altman-Z | 0.08 |
F-Score6
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)87.97%
Cap/Depr(5y)123.96%
Cap/Sales(3y)1.4%
Cap/Sales(5y)2.14%
Profit Quality(3y)163.55%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)4.17%
EPS 3Y7.19%
EPS 5Y33.24%
EPS Q2Q%6.02%
EPS Next Y11.27%
EPS Next 2Y13.09%
EPS Next 3Y13.78%
EPS Next 5YN/A
Revenue 1Y (TTM)9.78%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%7.2%
Revenue Next Year9.2%
Revenue Next 2Y11.1%
Revenue Next 3Y11.37%
Revenue Next 5Y13.27%
EBIT growth 1Y22.37%
EBIT growth 3Y13.19%
EBIT growth 5Y28.68%
EBIT Next Year16.64%
EBIT Next 3Y14.32%
EBIT Next 5Y18.63%
FCF growth 1Y188%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y188%
OCF growth 3YN/A
OCF growth 5YN/A