XP INC - CLASS A (XP) Stock Fundamental Analysis
USA - NASDAQ:XP - KYG982391099 - Common Stock
19.14 USD
+0.39 (+2.08%)
19.1213 USD
-0.02 (-0.1%)
Overall XP gets a fundamental rating of 4 out of 10. We evaluated XP against 237 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. XP is growing strongly while it also seems undervalued. This is an interesting combination
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.
XP had positive earnings in each of the past 5 years.
Of the past 5 years XP 4 years had a positive operating cash flow.
1.2 Ratios
XP's Return On Assets of 1.32% is on the low side compared to the rest of the industry. XP is outperformed by 63.29% of its industry peers.
XP has a Return On Equity of 22.10%. This is amongst the best in the industry. XP outperforms 89.03% of its industry peers.
XP has a worse Return On Invested Capital (1.25%) than 68.35% of its industry peers.
The Average Return On Invested Capital over the past 3 years for XP is significantly below the industry average of 7.61%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.32% | ||
| ROE | 22.1% | ||
| ROIC | 1.25% |
ROA(3y)1.58%
ROA(5y)1.89%
ROE(3y)21.19%
ROE(5y)21.51%
ROIC(3y)1.49%
ROIC(5y)1.78%
1.3 Margins
XP has a better Profit Margin (28.02%) than 71.73% of its industry peers.
In the last couple of years the Profit Margin of XP has grown nicely.
The Operating Margin of XP (33.11%) is comparable to the rest of the industry.
XP's Operating Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.11% | ||
| PM (TTM) | 28.02% | ||
| GM | N/A |
OM growth 3Y0.94%
OM growth 5Y1.22%
PM growth 3Y-3.75%
PM growth 5Y4.69%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
Compared to 1 year ago, XP has less shares outstanding
The number of shares outstanding for XP has been reduced compared to 5 years ago.
XP has a worse debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.04, we must say that XP is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of XP (0.04) is worse than 73.84% of its industry peers.
XP has a debt to FCF ratio of 9.13. This is a negative value and a sign of low solvency as XP would need 9.13 years to pay back of all of its debts.
XP has a Debt to FCF ratio (9.13) which is comparable to the rest of the industry.
A Debt/Equity ratio of 4.06 is on the high side and indicates that XP has dependencies on debt financing.
XP's Debt to Equity ratio of 4.06 is on the low side compared to the rest of the industry. XP is outperformed by 83.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.06 | ||
| Debt/FCF | 9.13 | ||
| Altman-Z | 0.04 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.20 indicates that XP may have some problems paying its short term obligations.
XP has a Current ratio of 0.20. This is amonst the worse of the industry: XP underperforms 88.19% of its industry peers.
A Quick Ratio of 0.20 indicates that XP may have some problems paying its short term obligations.
With a Quick ratio value of 0.20, XP is not doing good in the industry: 88.19% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.2 | ||
| Quick Ratio | 0.2 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.65% over the past year.
Measured over the past years, XP shows a very strong growth in Earnings Per Share. The EPS has been growing by 33.24% on average per year.
XP shows a small growth in Revenue. In the last year, the Revenue has grown by 6.74%.
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)8.65%
EPS 3Y7.19%
EPS 5Y33.24%
EPS Q2Q%20.59%
Revenue 1Y (TTM)6.74%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%5.6%
3.2 Future
Based on estimates for the next years, XP will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.23% on average per year.
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 Y13.69%
EPS Next 2Y13.51%
EPS Next 3Y13.23%
EPS Next 5YN/A
Revenue Next Year8.8%
Revenue Next 2Y10.97%
Revenue Next 3Y11.52%
Revenue Next 5Y13.27%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
A Price/Earnings ratio of 11.06 indicates a reasonable valuation of XP.
Compared to the rest of the industry, the Price/Earnings ratio of XP indicates a somewhat cheap valuation: XP is cheaper than 69.62% of the companies listed in the same industry.
XP is valuated cheaply when we compare the Price/Earnings ratio to 27.20, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 9.15, the valuation of XP can be described as very reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of XP indicates a somewhat cheap valuation: XP is cheaper than 79.32% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.71, XP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.06 | ||
| Fwd PE | 9.15 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, XP is valued cheaply inside the industry as 90.30% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, XP is valued cheaper than 82.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.24 | ||
| EV/EBITDA | 8.2 |
4.3 Compensation for Growth
XP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
XP's earnings are expected to grow with 13.23% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.81
PEG (5Y)0.33
EPS Next 2Y13.51%
EPS Next 3Y13.23%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 14.50%, XP is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 7.96, XP pays a better dividend. On top of this XP pays more dividend than 91.56% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, XP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.5% |
5.2 History
XP does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
41.40% of the earnings are spent on dividend by XP. This is a bit on the high side, but may be sustainable.
DP41.4%
EPS Next 2Y13.51%
EPS Next 3Y13.23%
19.14
+0.39 (+2.08%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners85.5%
Inst Owner Change-2.89%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap10.11B
Analysts81.11
Price Target22.89 (19.59%)
Short Float %6.02%
Short Ratio3.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.5% |
Yearly Dividend0.7
Dividend Growth(5Y)N/A
DP41.4%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.66%
Min EPS beat(2)1.46%
Max EPS beat(2)1.86%
EPS beat(4)2
Avg EPS beat(4)-0.19%
Min EPS beat(4)-2.46%
Max EPS beat(4)1.86%
EPS beat(8)6
Avg EPS beat(8)0.77%
EPS beat(12)9
Avg EPS beat(12)1.96%
EPS beat(16)13
Avg EPS beat(16)4.8%
Revenue beat(2)0
Avg Revenue beat(2)-5.2%
Min Revenue beat(2)-5.74%
Max Revenue beat(2)-4.66%
Revenue beat(4)0
Avg Revenue beat(4)-4.3%
Min Revenue beat(4)-5.74%
Max Revenue beat(4)-3.04%
Revenue beat(8)1
Avg Revenue beat(8)-2.41%
Revenue beat(12)2
Avg Revenue beat(12)-2.87%
Revenue beat(16)2
Avg Revenue beat(16)-3.8%
PT rev (1m)-1.13%
PT rev (3m)7.91%
EPS NQ rev (1m)3.27%
EPS NQ rev (3m)12.83%
EPS NY rev (1m)0.99%
EPS NY rev (3m)2.01%
Revenue NQ rev (1m)-0.43%
Revenue NQ rev (3m)-1.11%
Revenue NY rev (1m)-0.23%
Revenue NY rev (3m)-0.92%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.06 | ||
| Fwd PE | 9.15 | ||
| P/S | 3.06 | ||
| P/FCF | 5.24 | ||
| P/OCF | 5.05 | ||
| P/B | 2.41 | ||
| P/tB | 2.74 | ||
| EV/EBITDA | 8.2 |
EPS(TTM)1.73
EY9.04%
EPS(NY)2.09
Fwd EY10.93%
FCF(TTM)3.65
FCFY19.09%
OCF(TTM)3.79
OCFY19.81%
SpS6.26
BVpS7.94
TBVpS6.99
PEG (NY)0.81
PEG (5Y)0.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.32% | ||
| ROE | 22.1% | ||
| ROCE | 2.05% | ||
| ROIC | 1.25% | ||
| ROICexc | 1.29% | ||
| ROICexgc | 1.75% | ||
| OM | 33.11% | ||
| PM (TTM) | 28.02% | ||
| GM | N/A | ||
| FCFM | 58.35% |
ROA(3y)1.58%
ROA(5y)1.89%
ROE(3y)21.19%
ROE(5y)21.51%
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-15.13%
OM growth 3Y0.94%
OM growth 5Y1.22%
PM growth 3Y-3.75%
PM growth 5Y4.69%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.06 | ||
| Debt/FCF | 9.13 | ||
| Debt/EBITDA | 14.85 | ||
| Cap/Depr | 137.12% | ||
| Cap/Sales | 2.2% | ||
| Interest Coverage | 16.42 | ||
| Cash Conversion | 174.43% | ||
| Profit Quality | 208.2% | ||
| Current Ratio | 0.2 | ||
| Quick Ratio | 0.2 | ||
| Altman-Z | 0.04 |
F-Score6
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)87.96%
Cap/Depr(5y)123.94%
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)8.65%
EPS 3Y7.19%
EPS 5Y33.24%
EPS Q2Q%20.59%
EPS Next Y13.69%
EPS Next 2Y13.51%
EPS Next 3Y13.23%
EPS Next 5YN/A
Revenue 1Y (TTM)6.74%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%5.6%
Revenue Next Year8.8%
Revenue Next 2Y10.97%
Revenue Next 3Y11.52%
Revenue Next 5Y13.27%
EBIT growth 1Y10.66%
EBIT growth 3Y13.19%
EBIT growth 5Y28.69%
EBIT Next Year14.55%
EBIT Next 3Y14.92%
EBIT Next 5Y18.63%
FCF growth 1Y60.25%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y62.72%
OCF growth 3YN/A
OCF growth 5YN/A