XP (XP) AI Stock Analysis

• Market Cap: $9.36B
• Dividend Yield: 1.03%
• Average Volume (3M): 7.72M
• Price to Earnings (P/E): 10.6
• Beta (1Y): 1.16
• 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: 8,844,915
• 30 Day Avg. Volume: 7,720,812
• PEG Ratio: 0.60
• Price to Book (P/B): 2.01
• Price to Sales (P/S): 5.42
• P/FCF Ratio: 3.71
• Enterprise Value/Market Cap: 2.86
• Enterprise Value/Revenue: 1.48
• Enterprise Value/Gross Profit: 12.79
• Enterprise Value/Ebitda: 4.38
• 1Y Price Target: $23.50
• Price Target Upside: 34.36% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.8
• Revenue Forecast (FY): $3.40B

• Rating: 74 Outperform
• Price Target: $20.50 ▲(17.21% Upside)

XP's overall stock score is driven by strong financial performance and attractive valuation metrics. The company's robust net income growth and improved leverage position are significant strengths. Technical indicators suggest potential for upward movement, while strategic investments highlighted in the earnings call support future growth prospects.

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 shows strong financial performance with notable revenue and profit growth, particularly in net income. While operational profitability needs attention due to negative EBIT margins, the company has improved its leverage position. Cash flow generation is robust, supporting the company's financial stability. Continued focus on operational efficiency and debt management will be crucial for sustaining growth.

Income Statement

XP has demonstrated strong revenue growth with a TTM increase of 2.06% and consistent annual growth over the past years. The gross profit margin has improved to 28.13% in the TTM, indicating efficient cost management. However, the EBIT margin is negative, reflecting challenges in operational profitability. The net profit margin is robust at 67.88%, driven by significant net income, suggesting strong bottom-line performance despite operational inefficiencies.

Balance Sheet

The company's debt-to-equity ratio has decreased from 5.74 to 3.06 in the TTM, showing improved leverage management. Return on equity is strong at 23.23%, indicating effective use of equity to generate profits. However, the high debt levels remain a concern, posing potential risks if not managed carefully.

Cash Flow

XP's cash flow performance is impressive, with a substantial free cash flow growth rate of 73.16% in the TTM. The operating cash flow to net income ratio is low, suggesting room for improvement in converting earnings into cash. The free cash flow to net income ratio is nearly 1, indicating efficient cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	18.05B	19.87B	14.82B	14.18B	12.97B	8.60B
Gross Profit	2.09B	1.89B	1.62B	1.10B	2.06B	1.52B
EBITDA	6.12B	6.03B	4.81B	4.05B	4.18B	2.62B
Net Income	5.05B	4.51B	3.90B	3.58B	3.59B	2.08B
Balance Sheet
Total Assets	399.48B	347.46B	249.04B	192.03B	139.34B	96.03B
Cash, Cash Equivalents and Short-Term Investments	78.81B	74.91B	54.41B	41.30B	36.22B	22.05B
Total Debt	72.51B	115.13B	68.56B	35.52B	28.21B	32.12B
Total Liabilities	375.81B	327.41B	229.59B	174.99B	124.92B	85.13B
Stockholders Equity	23.66B	20.04B	19.45B	17.04B	14.42B	10.89B
Cash Flow
Free Cash Flow	17.93B	10.85B	7.93B	1.68B	-4.37B	1.22B
Operating Cash Flow	18.25B	11.18B	8.13B	1.80B	-4.02B	1.51B
Investing Cash Flow	-667.59M	-1.67B	538.81M	-371.28M	-1.15B	-582.01M
Financing Cash Flow	-4.35B	-5.78B	-4.39B	-200.30M	6.64B	788.71M

XP Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.49
• 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 17.49 is below the 20-day moving average (MA) of 18.27, below the 50-day MA of 17.72, and above the 200-day MA of 17.19, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 43.81 is Neutral, neither overbought nor oversold. The STOCH value of 8.62 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	$13.33B	27.49	31.39%	0.99%	27.00%	63.47%
SF	74 Outperform	$13.40B	23.24	11.73%	1.42%	7.54%	2.73%
XP	74 Outperform	$9.36B	10.62	21.24%	1.03%	-3.47%	7.48%
MKTX	68 Neutral	$6.61B	30.25	15.88%	1.70%	3.96%	-20.33%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
PIPR	67 Neutral	$5.77B	24.59	19.30%	1.60%	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.