XP INC - CLASS A (XP) Stock Fundamental Analysis
NASDAQ:XP - Nasdaq - KYG982391099 - Common Stock - Currency: USD
Overall XP gets a fundamental rating of 5 out of 10. We evaluated XP against 235 industry peers in the Capital Markets industry. While XP is still in line with the averages on profitability rating, there are concerns on its financial health. XP is growing strongly while it also seems undervalued. This is an interesting combination
1. Profitability
1.1 Basic Checks
In the past year XP was profitable.
In the past year XP had a positive cash flow from operations.
XP had positive earnings in each of the past 5 years.
Of the past 5 years XP 4 years had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.35%, XP is in line with its industry, outperforming 41.70% of the companies in the same industry.
XP has a better Return On Equity (22.43%) than 91.06% of its industry peers.
The Return On Invested Capital of XP (1.35%) is worse than 68.51% of its industry peers.
XP had an Average Return On Invested Capital over the past 3 years of 1.49%. This is significantly below the industry average of 7.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.35% | ||
| ROE | 22.43% | ||
| ROIC | 1.35% |
ROA(3y)1.58%
ROA(5y)1.89%
ROE(3y)21.19%
ROE(5y)21.5%
ROIC(3y)1.49%
ROIC(5y)1.78%
1.3 Margins
XP has a Profit Margin of 27.24%. This is in the better half of the industry: XP outperforms 70.21% of its industry peers.
In the last couple of years the Profit Margin of XP has grown nicely.
Looking at the Operating Margin, with a value of 33.99%, XP is in the better half of the industry, outperforming 61.70% of the companies in the same industry.
XP's Operating Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.99% | ||
| PM (TTM) | 27.24% | ||
| GM | N/A |
OM growth 3Y0.94%
OM growth 5Y1.22%
PM growth 3Y-3.75%
PM growth 5Y4.7%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
Compared to 1 year ago, XP has less shares outstanding
XP has less shares outstanding than it did 5 years ago.
The debt/assets ratio for XP is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.07, we must say that XP is in the distress zone and has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.07, XP is doing worse than 76.17% of the companies in the same industry.
The Debt to FCF ratio of XP is 7.08, which is on the high side as it means it would take XP, 7.08 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of XP (7.08) is comparable to the rest of the industry.
XP has a Debt/Equity ratio of 3.71. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of XP (3.71) is worse than 83.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.71 | ||
| Debt/FCF | 7.08 | ||
| Altman-Z | 0.07 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
XP has a Current Ratio of 0.18. This is a bad value and indicates that XP is not financially healthy enough and could expect problems in meeting its short term obligations.
XP has a Current ratio of 0.18. This is amonst the worse of the industry: XP underperforms 90.64% of its industry peers.
A Quick Ratio of 0.18 indicates that XP may have some problems paying its short term obligations.
XP has a worse Quick ratio (0.18) than 90.21% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.18 | ||
| Quick Ratio | 0.18 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 4.17% over the past year.
The Earnings Per Share has been growing by 33.24% on average over the past years. This is a very strong growth
Looking at the last year, XP shows a quite strong growth in Revenue. The Revenue has grown by 9.78% in the last year.
Measured over the past years, XP shows a very strong growth in Revenue. The Revenue has been growing by 27.13% on average per year.
EPS 1Y (TTM)4.17%
EPS 3Y7.19%
EPS 5Y33.24%
EPS Q2Q%6.02%
Revenue 1Y (TTM)9.78%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%7.2%
3.2 Future
XP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.01% yearly.
XP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.27% yearly.
EPS Next Y12.58%
EPS Next 2Y13.9%
EPS Next 3Y14.01%
EPS Next 5YN/A
Revenue Next Year9.18%
Revenue Next 2Y11%
Revenue Next 3Y11.18%
Revenue Next 5Y13.27%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.87, the valuation of XP can be described as reasonable.
Based on the Price/Earnings ratio, XP is valued a bit cheaper than 69.36% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.54. XP is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 8.53, the valuation of XP can be described as very reasonable.
84.26% of the companies in the same industry are more expensive than XP, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of XP to the average of the S&P500 Index (36.44), we can say XP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.87 | ||
| Fwd PE | 8.53 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, XP is valued cheaper than 91.06% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of XP indicates a rather cheap valuation: XP is cheaper than 84.68% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.36 | ||
| EV/EBITDA | 8.32 |
4.3 Compensation for Growth
XP's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
XP's earnings are expected to grow with 14.01% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.86
PEG (5Y)0.33
EPS Next 2Y13.9%
EPS Next 3Y14.01%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 14.51%, XP is a good candidate for dividend investing.
XP's Dividend Yield is rather good when compared to the industry average which is at 8.00. XP pays more dividend than 89.36% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.35, XP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.51% |
5.2 History
XP does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
XP pays out 43.17% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP43.17%
EPS Next 2Y13.9%
EPS Next 3Y14.01%
17.17
-0.95 (-5.24%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners82.84%
Inst Owner Change-0.31%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap9.07B
Analysts81.11
Price Target23.15 (34.83%)
Short Float %4.06%
Short Ratio2.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 14.51% |
Yearly Dividend0.68
Dividend Growth(5Y)N/A
DP43.17%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.08%
Min EPS beat(2)-1.63%
Max EPS beat(2)1.46%
EPS beat(4)2
Avg EPS beat(4)-0.25%
Min EPS beat(4)-2.46%
Max EPS beat(4)1.63%
EPS beat(8)6
Avg EPS beat(8)1.12%
EPS beat(12)9
Avg EPS beat(12)2.57%
EPS beat(16)13
Avg EPS beat(16)7.16%
Revenue beat(2)0
Avg Revenue beat(2)-4.39%
Min Revenue beat(2)-5.74%
Max Revenue beat(2)-3.04%
Revenue beat(4)0
Avg Revenue beat(4)-3.43%
Min Revenue beat(4)-5.74%
Max Revenue beat(4)-1.17%
Revenue beat(8)1
Avg Revenue beat(8)-2.12%
Revenue beat(12)2
Avg Revenue beat(12)-2.84%
Revenue beat(16)3
Avg Revenue beat(16)-3.29%
PT rev (1m)9.13%
PT rev (3m)25.41%
EPS NQ rev (1m)1.4%
EPS NQ rev (3m)4.23%
EPS NY rev (1m)1.18%
EPS NY rev (3m)2.19%
Revenue NQ rev (1m)-0.71%
Revenue NQ rev (3m)-0.44%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)-0.7%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.87 | ||
| Fwd PE | 8.53 | ||
| P/S | 2.91 | ||
| P/FCF | 4.36 | ||
| P/OCF | 4.23 | ||
| P/B | 2.39 | ||
| P/tB | 2.74 | ||
| EV/EBITDA | 8.32 |
EPS(TTM)1.58
EY9.2%
EPS(NY)2.01
Fwd EY11.73%
FCF(TTM)3.93
FCFY22.91%
OCF(TTM)4.06
OCFY23.62%
SpS5.91
BVpS7.18
TBVpS6.27
PEG (NY)0.86
PEG (5Y)0.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.35% | ||
| ROE | 22.43% | ||
| ROCE | 2.17% | ||
| ROIC | 1.35% | ||
| ROICexc | 1.38% | ||
| ROICexgc | 1.88% | ||
| OM | 33.99% | ||
| PM (TTM) | 27.24% | ||
| GM | N/A | ||
| FCFM | 66.59% |
ROA(3y)1.58%
ROA(5y)1.89%
ROE(3y)21.19%
ROE(5y)21.5%
ROIC(3y)1.49%
ROIC(5y)1.78%
ROICexc(3y)1.51%
ROICexc(5y)1.81%
ROICexgc(3y)1.95%
ROICexgc(5y)2.25%
ROCE(3y)2.48%
ROCE(5y)3.08%
ROICexcg growth 3Y-14.78%
ROICexcg growth 5Y-12.26%
ROICexc growth 3Y-16.98%
ROICexc growth 5Y-15.14%
OM growth 3Y0.94%
OM growth 5Y1.22%
PM growth 3Y-3.75%
PM growth 5Y4.7%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.71 | ||
| Debt/FCF | 7.08 | ||
| Debt/EBITDA | 12.67 | ||
| Cap/Depr | 131.23% | ||
| Cap/Sales | 2.06% | ||
| Interest Coverage | 17.35 | ||
| Cash Conversion | 193.06% | ||
| Profit Quality | 244.45% | ||
| Current Ratio | 0.18 | ||
| Quick Ratio | 0.18 | ||
| Altman-Z | 0.07 |
F-Score6
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)87.97%
Cap/Depr(5y)123.96%
Cap/Sales(3y)1.4%
Cap/Sales(5y)2.14%
Profit Quality(3y)163.55%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)4.17%
EPS 3Y7.19%
EPS 5Y33.24%
EPS Q2Q%6.02%
EPS Next Y12.58%
EPS Next 2Y13.9%
EPS Next 3Y14.01%
EPS Next 5YN/A
Revenue 1Y (TTM)9.78%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%7.2%
Revenue Next Year9.18%
Revenue Next 2Y11%
Revenue Next 3Y11.18%
Revenue Next 5Y13.27%
EBIT growth 1Y22.37%
EBIT growth 3Y13.19%
EBIT growth 5Y28.68%
EBIT Next Year16.64%
EBIT Next 3Y14.32%
EBIT Next 5Y18.63%
FCF growth 1Y188%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y188%
OCF growth 3YN/A
OCF growth 5YN/A