XP INC - CLASS A(NASDAQ:XP) stock Fundamental Analysis

Fundamental Rating

XP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 225 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.

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1. Profitability

1.1 Basic Checks

In the past year XP was profitable.

XP had a positive operating cash flow in the past year.

In the past 5 years XP has always been profitable.

In multiple years XP reported negative operating cash flow during the last 5 years.

1.2 Ratios

With a Return On Assets value of 1.38%, XP is not doing good in the industry: 61.19% of the companies in the same industry are doing better.

Looking at the Return On Equity, with a value of 20.49%, XP belongs to the top of the industry, outperforming 86.76% of the companies in the same industry.

The Return On Invested Capital of XP (1.36%) is worse than 68.49% of its industry peers.

The Average Return On Invested Capital over the past 3 years for XP is significantly below the industry average of 6.82%.

		Industry Rank	Sector Rank
ROA	1.38%
ROE	20.49%
ROIC	1.36%

ROA(3y)1.58%

ROA(5y)1.89%

ROE(3y)21.19%

ROE(5y)21.51%

ROIC(3y)1.48%

ROIC(5y)1.78%

1.3 Margins

XP's Profit Margin of 26.30% is fine compared to the rest of the industry. XP outperforms 64.38% of its industry peers.

In the last couple of years the Profit Margin of XP has grown nicely.

XP has a Operating Margin (32.36%) which is comparable to the rest of the industry.

In the last couple of years the Operating Margin of XP has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	32.36%
PM (TTM)	26.3%
GM	N/A

OM growth 3Y0.77%

OM growth 5Y1.12%

PM growth 3Y-3.74%

PM growth 5Y4.71%

GM growth 3YN/A

GM growth 5YN/A

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

XP has less shares outstanding than it did 1 year ago.

XP has less shares outstanding than it did 5 years ago.

The debt/assets ratio for XP is higher compared to a year ago.

2.2 Solvency

XP has an Altman-Z score of 0.06. This is a bad value and indicates that XP is not financially healthy and even has some risk of bankruptcy.

XP has a worse Altman-Z score (0.06) than 77.17% of its industry peers.

XP has a debt to FCF ratio of 6.76. This is a slightly negative value and a sign of low solvency as XP would need 6.76 years to pay back of all of its debts.

XP has a Debt to FCF ratio (6.76) which is comparable to the rest of the industry.

XP has a Debt/Equity ratio of 3.52. This is a high value indicating a heavy dependency on external financing.

Looking at the Debt to Equity ratio, with a value of 3.52, XP is doing worse than 83.11% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	3.52
Debt/FCF	6.76
Altman-Z	0.06

ROIC/WACCN/A

WACCN/A

2.3 Liquidity

A Current Ratio of 0.14 indicates that XP may have some problems paying its short term obligations.

XP's Current ratio of 0.14 is on the low side compared to the rest of the industry. XP is outperformed by 89.04% of its industry peers.

A Quick Ratio of 0.14 indicates that XP may have some problems paying its short term obligations.

XP has a Quick ratio of 0.14. This is amonst the worse of the industry: XP underperforms 89.04% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	0.14
Quick Ratio	0.14

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

XP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.18%, which is quite good.

The Earnings Per Share has been growing by 33.81% on average over the past years. This is a very strong growth

The Revenue has grown by 14.61% in the past year. This is quite good.

The Revenue has been growing by 27.13% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)10.18%

EPS 3Y6.9%

EPS 5Y33.81%

EPS Q2Q%2.37%

Revenue 1Y (TTM)14.61%

Revenue growth 3Y12.14%

Revenue growth 5Y27.13%

Sales Q2Q%7.87%

3.2 Future

The Earnings Per Share is expected to grow by 11.39% on average over the next years. This is quite good.

The Revenue is expected to grow by 11.70% on average over the next years. This is quite good.

EPS Next Y12.49%

EPS Next 2Y11.39%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue Next Year11.25%

Revenue Next 2Y11.7%

Revenue Next 3YN/A

Revenue Next 5YN/A

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.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 9.77 indicates a reasonable valuation of XP.

Based on the Price/Earnings ratio, XP is valued a bit cheaper than the industry average as 73.52% of the companies are valued more expensively.

Compared to an average S&P500 Price/Earnings ratio of 29.62, XP is valued rather cheaply.

A Price/Forward Earnings ratio of 8.70 indicates a reasonable valuation of XP.

XP's Price/Forward Earnings ratio is rather cheap when compared to the industry. XP is cheaper than 80.37% of the companies in the same industry.

When comparing the Price/Forward Earnings ratio of XP to the average of the S&P500 Index (22.70), we can say XP is valued rather cheaply.

		Industry Rank	Sector Rank
PE	9.77
Fwd PE	8.7

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, XP is valued cheaply inside the industry as 89.04% of the companies are valued more expensively.

Based on the Price/Free Cash Flow ratio, XP is valued cheaply inside the industry as 85.39% of the companies are valued more expensively.

		Industry Rank	Sector Rank
P/FCF	3.98
EV/EBITDA	8.28

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.

PEG (NY)0.78

PEG (5Y)0.29

EPS Next 2Y11.39%

EPS Next 3YN/A

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 17.95%, XP is a good candidate for dividend investing.

Compared to an average industry Dividend Yield of 10.21, XP pays a better dividend. On top of this XP pays more dividend than 94.06% of the companies listed in the same industry.

XP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.27.

		Industry Rank	Sector Rank
Dividend Yield	17.95%

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

XP pays out 44.90% of its income as dividend. This is a bit on the high side, but may be sustainable.

DP44.9%

EPS Next 2Y11.39%

EPS Next 3YN/A

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XP INC - CLASS A

NASDAQ:XP (2/21/2025, 8:00:02 PM)

Premarket: 14.71 +0.06 (+0.41%)

14.65

-0.4 (-2.66%)

Chartmill FA Rating

GICS SectorFinancials

GICS IndustryGroupFinancial Services

GICS IndustryCapital Markets

Earnings (Last)02-18 2025-02-18/amc

Earnings (Next)N/A N/A

Inst Owners81.82%

Inst Owner Change-89.39%

Ins OwnersN/A

Ins Owner ChangeN/A

Market Cap7.88B

Analysts78.82

Price Target18.36 (25.32%)

Short Float %5.05%

Short Ratio2.55

Dividend

		Industry Rank	Sector Rank
Dividend Yield	17.95%

Yearly Dividend6.5

Dividend Growth(5Y)N/A

DP44.9%

Div Incr Years0

Div Non Decr Years0

Ex-DateN/A

Surprises & Revisions

EPS beat(2)1

Avg EPS beat(2)-0.41%

Min EPS beat(2)-2.46%

Max EPS beat(2)1.63%

EPS beat(4)3

Avg EPS beat(4)1.04%

Min EPS beat(4)-2.46%

Max EPS beat(4)3.31%

EPS beat(8)6

Avg EPS beat(8)-0.48%

EPS beat(12)10

Avg EPS beat(12)4.75%

EPS beat(16)14

Avg EPS beat(16)10.34%

Revenue beat(2)0

Avg Revenue beat(2)-2.47%

Min Revenue beat(2)-3.77%

Max Revenue beat(2)-1.17%

Revenue beat(4)0

Avg Revenue beat(4)-2.61%

Min Revenue beat(4)-3.77%

Max Revenue beat(4)-1.17%

Revenue beat(8)1

Avg Revenue beat(8)-2.9%

Revenue beat(12)2

Avg Revenue beat(12)-3.48%

Revenue beat(16)4

Avg Revenue beat(16)-2.53%

PT rev (1m)-21.74%

PT rev (3m)-30.47%

EPS NQ rev (1m)2.74%

EPS NQ rev (3m)4.44%

EPS NY rev (1m)-1.04%

EPS NY rev (3m)-0.17%

Revenue NQ rev (1m)-2.9%

Revenue NQ rev (3m)-5.04%

Revenue NY rev (1m)-2.68%

Revenue NY rev (3m)-6.16%

Valuation

		Industry Rank	Sector Rank
PE	9.77
Fwd PE	8.7
P/S	2.71
P/FCF	3.98
P/OCF	3.92
P/B	2.11
P/tB	2.4
EV/EBITDA	8.28

EPS(TTM)1.5

EY10.24%

EPS(NY)1.68

Fwd EY11.5%

FCF(TTM)3.68

FCFY25.1%

OCF(TTM)3.74

OCFY25.53%

SpS5.42

BVpS6.95

TBVpS6.11

PEG (NY)0.78

PEG (5Y)0.29

Profitability

		Industry Rank	Sector Rank
ROA	1.38%
ROE	20.49%
ROCE	2.21%
ROIC	1.36%
ROICexc	1.38%
ROICexgc	1.78%
OM	32.36%
PM (TTM)	26.3%
GM	N/A
FCFM	67.91%

ROA(3y)1.58%

ROA(5y)1.89%

ROE(3y)21.19%

ROE(5y)21.51%

ROIC(3y)1.48%

ROIC(5y)1.78%

ROICexc(3y)1.51%

ROICexc(5y)1.81%

ROICexgc(3y)1.94%

ROICexgc(5y)2.25%

ROCE(3y)2.46%

ROCE(5y)3.07%

ROICexcg growth 3Y-14.97%

ROICexcg growth 5Y-12.38%

ROICexc growth 3Y-17.39%

ROICexc growth 5Y-15.39%

OM growth 3Y0.77%

OM growth 5Y1.12%

PM growth 3Y-3.74%

PM growth 5Y4.71%

GM growth 3YN/A

GM growth 5YN/A

F-Score5

Asset Turnover0.05

Health

		Industry Rank	Sector Rank
Debt/Equity	3.52
Debt/FCF	6.76
Debt/EBITDA	13.24
Cap/Depr	66.11%
Cap/Sales	1.15%
Interest Coverage	21.1
Cash Conversion	202.52%
Profit Quality	258.2%
Current Ratio	0.14
Quick Ratio	0.14
Altman-Z	0.06

F-Score5

WACCN/A

ROIC/WACCN/A

Cap/Depr(3y)N/A

Cap/Depr(5y)N/A

Cap/Sales(3y)N/A

Cap/Sales(5y)N/A

Profit Quality(3y)N/A

Profit Quality(5y)N/A

High Growth Momentum

Growth

EPS 1Y (TTM)10.18%

EPS 3Y6.9%

EPS 5Y33.81%

EPS Q2Q%2.37%

EPS Next Y12.49%

EPS Next 2Y11.39%

EPS Next 3YN/A

EPS Next 5YN/A

Revenue 1Y (TTM)14.61%

Revenue growth 3Y12.14%

Revenue growth 5Y27.13%

Sales Q2Q%7.87%

Revenue Next Year11.25%

Revenue Next 2Y11.7%

Revenue Next 3YN/A

Revenue Next 5YN/A

EBIT growth 1Y27.03%

EBIT growth 3Y13.01%

EBIT growth 5Y28.55%

EBIT Next Year16.25%

EBIT Next 3YN/A

EBIT Next 5YN/A

FCF growth 1Y117.83%

FCF growth 3YN/A

FCF growth 5YN/A

OCF growth 1Y108.34%

OCF growth 3YN/A

OCF growth 5YN/A

XP INC - CLASS A (XP) Stock Fundamental Analysis

1. Profitability

1.1 Basic Checks

1.2 Ratios

1.3 Margins

More info and screens

2. Health

2.1 Basic Checks

2.2 Solvency

2.3 Liquidity

More info and screens

3. Growth

3.1 Past

3.2 Future

3.3 Evolution

More info and screens

4. Valuation

4.1 Price/Earnings Ratio

4.2 Price Multiples

4.3 Compensation for Growth

More info and screens

5. Dividend

5.1 Amount

5.2 History

5.3 Sustainability

More info and screens