XP (XP) AI Stock Analysis

• Market Cap: $9.42B
• Dividend Yield: 3.64%
• Average Volume (3M): 6.83M
• Price to Earnings (P/E): 11.1
• Beta (1Y): 1.10
• 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: 5,914,439
• 30 Day Avg. Volume: 6,830,902
• 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: 2.73
• Enterprise Value/Revenue: 3.53
• Enterprise Value/Gross Profit: 13.71
• Enterprise Value/Ebitda: 4.26
• 1Y Price Target: $23.50
• Price Target Upside: 31.51% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 64 Neutral
• Price Target: $19.00 ▲(6.32% Upside)

XP's overall stock score reflects strong profitability and attractive valuation, with a solid earnings call performance. However, technical indicators suggest caution, and financial performance is hindered by high leverage and declining revenue growth. The company's ability to manage these risks will be crucial for future performance.

Positive Factors

Strong Profitability

Record net income and strong profitability growth indicate effective business operations and financial health, supporting long-term sustainability.

Growth in Client Assets

Significant growth in client assets reflects XP's strong market position and ability to attract and retain clients, enhancing future revenue potential.

Retail Revenue Growth

Continued growth in retail revenue indicates successful expansion in key segments, contributing to a diversified and resilient revenue stream.

Negative Factors

High Leverage

High leverage poses financial risk, potentially limiting flexibility and increasing vulnerability to economic downturns, impacting long-term stability.

Declining Revenue Growth

Declining revenue growth indicates potential market saturation or competitive pressures, which could hinder future expansion and profitability.

Challenges in Investment Banking

Challenges in investment banking could limit growth in a key revenue segment, affecting overall business diversification and resilience.

XP Business Overview & Revenue Model

Company Description

XP Inc. is a leading financial services company based in Brazil, primarily focused on providing a range of investment products and services to individual and institutional investors. Founded in 2009, XP operates in the fintech sector and is known for its innovative digital platform that offers brokerage services, asset management, and financial advisory. The company aims to democratize investments and enhance financial literacy among Brazilians, offering tools for trading, investment education, and access to various financial products including stocks, mutual funds, and fixed-income securities.

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: Positive
• Last Price: 17.87
• 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 17.87 is above the 20-day moving average (MA) of 16.90, above the 50-day MA of 17.78, and above the 200-day MA of 16.61, indicating a bullish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 59.38 is Neutral, neither overbought nor oversold. The STOCH value of 87.09 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	―	$11.29B	29.26	29.16%	1.12%	23.24%	55.76%
PIPR	―	$5.77B	29.19	17.91%	1.73%	10.46%	50.47%
MKTX	―	$5.94B	27.49	16.41%	1.85%	8.30%	-14.39%
SF	―	$12.01B	20.74	―	1.53%	7.53%	2.73%
Sector *	―	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
XP	―	$9.42B	11.10	22.42%	3.64%	-6.77%	2.95%
FRHC	―	$9.94B	120.42	6.78%	―	19.14%	-75.48%

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.