XP (XP) AI Stock Analysis

• Market Cap: $9.88B
• Dividend Yield: 3.26%
• Average Volume (3M): 7.12M
• Price to Earnings (P/E): 11.6
• Beta (1Y): 1.08
• Revenue Growth: -6.77%
• EPS Growth: 2.95%
• Country: US
• Employees: 6,834
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 0.46
• Shares Outstanding: 423,566,440
• 10 Day Avg. Volume: 7,488,291
• 30 Day Avg. Volume: 7,119,822
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.61
• Enterprise Value/Revenue: 3.53
• Enterprise Value/Gross Profit: 13.71
• Enterprise Value/Ebitda: 4.26
• 1Y Price Target: $22.00
• Price Target Upside: 10.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 67 Neutral
• Price Target: $20.00 ▲(0.25% Upside)

XP's overall stock score reflects strong financial performance and positive earnings call sentiment, supported by reasonable valuation metrics. However, technical indicators suggest caution due to potential overbought conditions. The company's high leverage and operational inefficiencies pose risks that need to be managed for sustained growth.

Positive Factors

Client Asset Growth

The significant growth in client assets reflects XP's strong market position and ability to attract and retain clients, which is crucial for long-term revenue generation and competitive advantage in the financial services industry.

Profitability and ROE

A strong return on equity indicates efficient use of shareholder capital and robust profitability, enhancing XP's ability to reinvest in growth opportunities and provide shareholder returns.

Life Insurance and Retirement Plans Expansion

Expansion in life insurance and retirement plans diversifies XP's revenue streams and strengthens its market position in financial services, providing a buffer against cyclical downturns in other segments.

Negative Factors

High Leverage

High leverage can strain financial flexibility and increase risk, especially in volatile markets, potentially impacting XP's ability to invest in growth and weather economic downturns.

Declining Revenue Growth

A decline in revenue growth indicates potential challenges in market expansion and competitive pressures, which could affect long-term profitability and market share if not addressed.

Operational Inefficiencies

Negative EBIT margin highlights operational inefficiencies that can erode profitability and hinder XP's ability to scale effectively, necessitating strategic improvements for sustainable growth.

XP Business Overview & Revenue Model

Company Description

XP Inc. provides financial products and services in Brazil. It offers securities brokerage, private pension plans, commercial, and investment banking products, such as loan operations and transactions in the foreign exchange markets and deposits; product structuring and capital markets services for corporate clients and issuers of fixed income products; advisory services for mass-affluent and institutional clients; and wealth management services for high-net-worth customers and institutional clients. The company also offers Xpeed, an online financial education portal that offers seminars, classes, and learning tools to help teach individuals on topics, such as basics of investing, techniques, and investment strategies, as well as insurance brokerage services. In addition, it operates XP Platform, an open product platform that provides clients to access investment products in the market, including equity and fixed income securities, mutual and hedge funds, private equity, structured products, credit cards, loan operations, life insurance, pension plans, real-estate investment funds, and others. The company was founded in 2001 and is based in São Paulo, Brazil.

How the Company Makes Money

XP Inc. generates revenue primarily through brokerage and asset management fees. The company earns brokerage fees by facilitating the buying and selling of securities for its clients, which include retail investors, institutional investors, and corporate clients. Additionally, XP earns management fees from its wealth and asset management services, where it charges clients for managing and overseeing their investment portfolios. Other revenue streams include advisory fees for financial planning and consulting services. XP also benefits from strategic partnerships with various financial institutions, enhancing its product offerings and market reach, which contributes to its overall earnings.

XP Financial Statement Overview

Summary

XP demonstrates strong profitability with high net profit margins and effective equity utilization. However, declining revenue growth and high leverage present potential risks. The company needs to address operational inefficiencies and manage its debt levels to ensure long-term financial stability. Despite these challenges, XP's cash flow generation remains robust, supporting its financial health.

Income Statement

XP's income statement reveals a mixed performance. The company has maintained a strong net profit margin of 67.44% TTM, indicating robust profitability. However, the revenue growth rate has declined by 2.07% TTM, suggesting challenges in expanding its revenue base. The EBIT margin is negative, reflecting operational inefficiencies, but the EBITDA margin remains healthy at 82.93% TTM, showing strong cash flow generation capabilities.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 3.33 TTM, indicating significant leverage and potential financial risk. Return on equity is solid at 23.24% TTM, demonstrating effective use of equity to generate profits. However, the high leverage could pose risks if not managed carefully, especially in volatile market conditions.

Cash Flow

Cash flow analysis indicates a decline in free cash flow growth by 11.07% TTM, which could impact future liquidity. The operating cash flow to net income ratio is low at 0.06 TTM, suggesting limited cash conversion from earnings. However, the free cash flow to net income ratio is strong at 97.42% TTM, indicating efficient cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.30B	7.42B	6.53B	5.94B	6.20B	5.02B
Gross Profit	1.88B	1.89B	1.62B	1.10B	2.06B	1.52B
EBITDA	6.05B	6.03B	4.81B	4.05B	4.18B	2.62B
Net Income	4.92B	4.51B	3.90B	3.58B	3.59B	2.08B
Balance Sheet
Total Assets	373.85B	347.46B	249.04B	192.03B	139.34B	96.03B
Cash, Cash Equivalents and Short-Term Investments	76.45B	74.91B	54.41B	41.30B	36.22B	22.05B
Total Debt	74.16B	115.13B	68.56B	35.52B	28.21B	32.12B
Total Liabilities	351.58B	327.41B	229.59B	174.99B	124.92B	85.13B
Stockholders Equity	22.26B	20.04B	19.45B	17.04B	14.42B	10.89B
Cash Flow
Free Cash Flow	10.36B	10.85B	7.93B	1.68B	-4.37B	1.22B
Operating Cash Flow	10.63B	11.18B	8.13B	1.80B	-4.02B	1.51B
Investing Cash Flow	-658.26M	-1.67B	538.81M	-371.28M	-1.15B	-582.01M
Financing Cash Flow	-3.84B	-5.78B	-4.39B	-200.30M	6.64B	788.71M

XP Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XP, the sentiment is Positive. The current price of 19.95 is above the 20-day moving average (MA) of 17.97, above the 50-day MA of 17.52, and above the 200-day MA of 15.81, indicating a bullish trend. The MACD of 0.54 indicates Negative momentum. The RSI at 69.10 is Neutral, neither overbought nor oversold. The STOCH value of 81.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for XP.

XP Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EVR	79 Outperform	13.44B	31.68	27.93%	0.90%	23.24%	55.76%
SF	77 Outperform	11.65B	22.05	12.86%	1.56%	8.76%	10.32%
PIPR	73 Outperform	6.27B	29.90	14.75%	1.53%	10.46%	50.47%
XP	67 Neutral	$9.88B	11.64	22.42%	3.26%	-6.77%	2.95%
MKTX	67 Neutral	6.86B	30.88	16.08%	1.68%	8.30%	-14.39%
FRHC	58 Neutral	10.34B	123.49	6.56%	―	19.14%	-75.48%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%

XP Corporate Events

XP Inc. Reports Strong Q2 2025 Financial Results Despite Net Inflow Decline

On August 18, 2025, XP Inc. reported its financial results for the second quarter of 2025, highlighting a 14% year-over-year increase in total client assets, reaching R$1.4 trillion. Despite a significant 70% drop in total net inflow compared to the previous year, the company saw a 24% growth in its credit portfolio and a 45% increase in gross written premiums. The net income rose by 18% year-over-year, driven by strong performance in retail revenue, which grew by 9%. The announcement underscores XP Inc.’s continued growth in client assets and revenue, although challenges remain in maintaining net inflow levels.

XP Inc. Releases Interim Financial Statements for June 2025

On August 18, 2025, XP Inc. released its unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2025. The review, conducted by PricewaterhouseCoopers, indicated that the financial statements were prepared in accordance with International Accounting Standard 34, with no significant issues identified. This release provides stakeholders with insights into the company’s financial health and operational performance, reflecting an increase in total assets and financial assets compared to the previous year-end.