XP (XP) AI Stock Analysis

• Market Cap: $9.15B
• Dividend Yield: 3.52%
• Average Volume (3M): 6.58M
• Price to Earnings (P/E): 10.4
• Beta (1Y): 1.08
• Revenue Growth: -3.47%
• EPS Growth: 7.48%
• 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: 9,053,640
• 30 Day Avg. Volume: 6,582,268
• 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: 2.93
• Enterprise Value/Revenue: 3.67
• Enterprise Value/Gross Profit: 14.25
• Enterprise Value/Ebitda: 4.43
• 1Y Price Target: $23.50
• Price Target Upside: 35.29% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.79
• Revenue Forecast (FY): $3.42B

• Rating: 70 Neutral
• Price Target: $20.00 ▲(15.14% Upside)

XP's overall stock score reflects a combination of strong earnings growth and reasonable valuation, balanced by financial risks related to high leverage and declining revenue growth. The positive sentiment from the recent earnings call and stable technical indicators further support the stock's potential, despite some operational challenges.

Positive Factors

Client Asset Growth

The substantial growth in client assets indicates XP's strong market position and ability to attract and retain clients, which is crucial for long-term revenue generation and competitive advantage.

Share Repurchase Program

The share repurchase program reflects management's confidence in the company's future prospects and can enhance shareholder value by reducing share count and increasing earnings per share.

Strong Profitability

High net profit margins demonstrate XP's efficient cost management and pricing power, which are critical for sustaining profitability and funding future growth initiatives.

Negative Factors

High Leverage

The high leverage poses financial risks, potentially limiting XP's ability to invest in growth opportunities and increasing vulnerability to economic downturns.

Declining Revenue Growth

The decline in revenue growth suggests challenges in expanding the business, which could impact XP's ability to maintain its competitive edge and market share over time.

Operational Inefficiencies

Negative EBIT margins highlight operational challenges that could hinder XP's ability to improve profitability and compete effectively in the financial services market.

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 generates revenue through several key streams, primarily from brokerage fees on trades executed by clients on its platform. The company charges commissions on securities transactions, which form a significant portion of its revenue. Additionally, XP earns money through asset management fees from its investment funds and by providing advisory services to clients for a fee. The company also benefits from interest income on cash balances held by clients and from proprietary trading activities. Strategic partnerships with financial institutions enhance XP's product offerings and customer base, further contributing to its 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: Negative
• Last Price: 17.37
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XP, the sentiment is Negative. The current price of 17.37 is below the 20-day moving average (MA) of 18.34, below the 50-day MA of 18.01, and above the 200-day MA of 17.08, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 42.91 is Neutral, neither overbought nor oversold. The STOCH value of 5.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for XP.

XP Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EVR	76 Outperform	$11.84B	24.42	31.39%	1.12%	27.00%	63.47%
SF	76 Outperform	$11.91B	20.65	11.73%	1.51%	7.54%	2.73%
MKTX	73 Outperform	$6.01B	27.51	15.88%	1.88%	3.96%	-20.33%
XP	70 Neutral	$9.15B	10.39	21.24%	3.52%	-3.47%	7.48%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PIPR	67 Neutral	$5.77B	24.59	19.30%	1.77%	12.77%	36.43%
FRHC	58 Neutral	$8.59B	104.16	0.38%	―	7.40%	-97.69%

XP Corporate Events

XP Inc. Reports Strong Q3 2025 Financial Performance

On November 17, 2025, XP Inc. announced its financial results for the third quarter of 2025, highlighting a 9% year-over-year increase in gross revenue, reaching R$4.9 billion, driven by growth in its Corporate & Issuer Services. The company reported a 12% increase in total client assets, amounting to R$1.4 trillion, and a 25% rise in gross written premiums, reflecting robust performance in its insurance segment. Despite a 14% year-over-year decline in total net inflow, the company saw a 204% quarter-over-quarter increase, indicating strong recovery momentum. XP’s strategic inclusion of institutional client assets since 2025 has contributed to a total client asset growth of 16% year-over-year, reaching R$1.9 trillion. The company’s focus on maintaining high customer satisfaction is evident in its NPS score of 74, underscoring its commitment to enhancing client experience.

XP Inc. Releases Q3 2025 Financial Results

On November 17, 2025, XP Inc. released its unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2025. The review, conducted by PricewaterhouseCoopers, concluded 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 XP Inc.’s financial health and operational performance, reflecting its strong market position and financial stability.

XP Inc. Announces Dividend and Share Repurchase Initiatives

On November 17, 2025, XP Inc. announced the approval of three capital allocation actions by its board of directors: a cash dividend, the retirement of treasury shares, and a new share repurchase program. The cash dividend of US$0.18 per Class A common share is payable on December 18, 2025, with a total distribution of approximately R$500 million. The company retired 10,970,754 Class A common shares, reducing its total share count by 2.1%. Additionally, a new share repurchase program was authorized, allowing up to R$1.0 billion in repurchases over the next year, funded by existing cash. These actions are expected to impact XP’s financial structure and market positioning, potentially benefiting shareholders and enhancing the company’s value.

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.