XP Inc.
XP Inc. Fundamental Analysis
XP Inc. (XP) shows strong financial fundamentals with a PE ratio of 11.17, profit margin of 28.68%, and ROE of 22.85%. The company generates $18.3B in annual revenue with strong year-over-year growth of 13.67%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 77.6/100 based on profitability, valuation, growth, and balance sheet metrics. The B grade reflects solid fundamentals with room for improvement in valuation or growth.
Fundamental Health Score
We analyze XP's fundamental strength across five key dimensions:
Efficiency Score
WeakXP struggles to generate sufficient returns from assets.
Valuation Score
ExcellentXP trades at attractive valuation levels.
Growth Score
ExcellentXP delivers strong and consistent growth momentum.
Financial Health Score
ModerateXP shows balanced financial health with some risks.
Profitability Score
ExcellentXP achieves industry-leading margins.
Key Financial Metrics
Is XP Expensive or Cheap?
P/E Ratio
XP trades at 11.17 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, XP's PEG of 0.66 indicates potential undervaluation.
Price to Book
The market values XP Inc. at 2.45 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 7.57 times EBITDA. This is generally considered low.
How Well Does XP Make Money?
Net Profit Margin
For every $100 in sales, XP Inc. keeps $28.68 as profit after all expenses.
Operating Margin
Core operations generate 17.64 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $22.85 in profit for every $100 of shareholder equity.
ROA
XP Inc. generates $1.30 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
XP Inc. generates strong operating cash flow of $12.21B, reflecting robust business health.
Free Cash Flow
XP Inc. generates strong free cash flow of $11.86B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $22.49 in free cash annually.
FCF Yield
XP converts 19.90% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
11.17
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.66
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.45
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.25
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.89
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.56
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.23
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.01
vs 25 benchmark
How XP Stacks Against Its Sector Peers
| Metric | XP Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 11.17 | 18.73 | Better (Cheaper) |
| ROE | 22.85% | 847.00% | Weak |
| Net Margin | 28.68% | 3919.00% | Weak |
| Debt/Equity | 0.89 | 0.93 | Neutral |
| Current Ratio | 0.56 | 674.76 | Weak Liquidity |
| ROA | 1.30% | -21563.00% (disorted) | Weak |
XP outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews XP Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
92.61%
Industry Style: Value, Dividend, Cyclical
High GrowthEPS CAGR
289.64%
Industry Style: Value, Dividend, Cyclical
High GrowthFCF CAGR
373.40%
Industry Style: Value, Dividend, Cyclical
High Growth