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XP INC - CLASS A (XP) Stock Fundamental Analysis

NASDAQ:XP - Nasdaq - KYG982391099 - Common Stock - Currency: USD

13.96  +0.29 (+2.12%)

After market: 13.96 0 (0%)

Fundamental Rating

5

Taking everything into account, XP scores 5 out of 10 in our fundamental rating. XP was compared to 228 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 evaluated to be cheap and growing strongly. This does not happen too often!


Dividend Valuation Growth Profitability Health

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4

1. Profitability

1.1 Basic Checks

XP had positive earnings in the past year.
In the past year XP had a positive cash flow from operations.
In the past 5 years XP has always been profitable.
In multiple years XP reported negative operating cash flow during the last 5 years.
XP Yearly Net Income VS EBIT VS OCF VS FCFXP Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 2B -2B 4B -4B 6B 8B

1.2 Ratios

With a Return On Assets value of 1.38%, XP is not doing good in the industry: 62.72% of the companies in the same industry are doing better.
XP has a Return On Equity of 20.49%. This is amongst the best in the industry. XP outperforms 87.72% of its industry peers.
Looking at the Return On Invested Capital, with a value of 1.36%, XP is doing worse than 68.42% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for XP is significantly below the industry average of 7.06%.
Industry RankSector 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%
XP Yearly ROA, ROE, ROICXP Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

1.3 Margins

XP has a better Profit Margin (26.30%) than 66.67% 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 RankSector 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
XP Yearly Profit, Operating, Gross MarginsXP Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

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1

2. Health

2.1 Basic Checks

Compared to 1 year ago, XP has less shares outstanding
Compared to 5 years ago, XP has less shares outstanding
Compared to 1 year ago, XP has a worse debt to assets ratio.
XP Yearly Shares OutstandingXP Yearly Shares OutstandingYearly Shares Outstanding 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M 500M
XP Yearly Total Debt VS Total AssetsXP Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2017 2018 2019 2020 2021 2022 2023 2024 100B 200B 300B

2.2 Solvency

Based on the Altman-Z score of 0.06, we must say that XP is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.06, XP is not doing good in the industry: 74.56% of the companies in the same industry are doing better.
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.
The Debt to FCF ratio of XP (6.76) is comparable to the rest of the industry.
A Debt/Equity ratio of 3.52 is on the high side and indicates that XP has dependencies on debt financing.
XP has a worse Debt to Equity ratio (3.52) than 81.58% of its industry peers.
Industry RankSector Rank
Debt/Equity 3.52
Debt/FCF 6.76
Altman-Z 0.06
ROIC/WACCN/A
WACCN/A
XP Yearly LT Debt VS Equity VS FCFXP Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 5B 10B 15B 20B

2.3 Liquidity

XP has a Current Ratio of 0.14. This is a bad value and indicates that XP is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of XP (0.14) is worse than 88.16% 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 worse Quick ratio (0.14) than 88.16% of its industry peers.
Industry RankSector Rank
Current Ratio 0.14
Quick Ratio 0.14
XP Yearly Current Assets VS Current LiabilitesXP Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B 80B

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8

3. Growth

3.1 Past

XP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.08%, 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
Looking at the last year, XP shows a quite strong growth in Revenue. The Revenue has grown by 14.61% in the last year.
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)11.08%
EPS 3Y7.19%
EPS 5Y33.81%
EPS Q2Q%5.69%
Revenue 1Y (TTM)14.61%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%9.74%

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 12.27% on average per year.
XP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.27% yearly.
EPS Next Y10.17%
EPS Next 2Y11.97%
EPS Next 3Y12.27%
EPS Next 5YN/A
Revenue Next Year9.94%
Revenue Next 2Y11.33%
Revenue Next 3Y11.34%
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.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
XP Yearly Revenue VS EstimatesXP Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 5B 10B 15B 20B 25B
XP Yearly EPS VS EstimatesXP Yearly EPS VS EstimatesYearly EPS VS Estimates 2019 2020 2021 2022 2023 2024 2025 2026 2027 2 4 6 8 10

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7

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 9.50 indicates a reasonable valuation of XP.
Based on the Price/Earnings ratio, XP is valued a bit cheaper than the industry average as 70.61% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of XP to the average of the S&P500 Index (28.29), we can say XP is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 8.65, the valuation of XP can be described as reasonable.
XP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. XP is cheaper than 73.68% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.08. XP is valued rather cheaply when compared to this.
Industry RankSector Rank
PE 9.5
Fwd PE 8.65
XP Price Earnings VS Forward Price EarningsXP Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of XP indicates a rather cheap valuation: XP is cheaper than 88.16% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, XP is valued cheaper than 85.96% of the companies in the same industry.
Industry RankSector Rank
P/FCF 3.92
EV/EBITDA 8.16
XP Per share dataXP EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6

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 12.27% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.93
PEG (5Y)0.28
EPS Next 2Y11.97%
EPS Next 3Y12.27%

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5

5. Dividend

5.1 Amount

XP has a Yearly Dividend Yield of 18.84%, which is a nice return.
XP's Dividend Yield is rather good when compared to the industry average which is at 8.65. XP pays more dividend than 96.49% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.52, XP pays a better dividend.
Industry RankSector Rank
Dividend Yield 18.84%

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
XP Yearly Dividends per shareXP Yearly Dividends per shareYearly Dividends per share 2023 2024 0.5 1 1.5 2

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 2Y11.97%
EPS Next 3Y12.27%
XP Yearly Income VS Free CF VS DividendXP Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 2B -2B 4B -4B 6B
XP Dividend Payout.XP Dividend Payout, showing the Payout Ratio.XP Dividend Payout.PayoutRetained Earnings

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XP INC - CLASS A

NASDAQ:XP (4/17/2025, 8:00:02 PM)

After market: 13.96 0 (0%)

13.96

+0.29 (+2.12%)

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 Change1.33%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap7.54B
Analysts78.89
Price Target18.46 (32.23%)
Short Float %3.36%
Short Ratio1.63
Dividend
Industry RankSector Rank
Dividend Yield 18.84%
Yearly Dividend1.11
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)1.81%
PT rev (3m)-21.3%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.74%
EPS NY rev (1m)-1.26%
EPS NY rev (3m)-2.29%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.9%
Revenue NY rev (1m)-0.13%
Revenue NY rev (3m)-6.01%
Valuation
Industry RankSector Rank
PE 9.5
Fwd PE 8.65
P/S 2.66
P/FCF 3.92
P/OCF 3.86
P/B 2.08
P/tB 2.36
EV/EBITDA 8.16
EPS(TTM)1.47
EY10.53%
EPS(NY)1.61
Fwd EY11.57%
FCF(TTM)3.56
FCFY25.49%
OCF(TTM)3.62
OCFY25.92%
SpS5.24
BVpS6.73
TBVpS5.91
PEG (NY)0.93
PEG (5Y)0.28
Profitability
Industry RankSector 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 RankSector 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)11.08%
EPS 3Y7.19%
EPS 5Y33.81%
EPS Q2Q%5.69%
EPS Next Y10.17%
EPS Next 2Y11.97%
EPS Next 3Y12.27%
EPS Next 5YN/A
Revenue 1Y (TTM)14.61%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%9.74%
Revenue Next Year9.94%
Revenue Next 2Y11.33%
Revenue Next 3Y11.34%
Revenue Next 5Y13.27%
EBIT growth 1Y27.03%
EBIT growth 3Y13.01%
EBIT growth 5Y28.55%
EBIT Next Year16.06%
EBIT Next 3Y13.18%
EBIT Next 5Y18.63%
FCF growth 1Y117.83%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y108.34%
OCF growth 3YN/A
OCF growth 5YN/A