XP INC - CLASS A (XP) Stock Fundamental Analysis
NASDAQ:XP - KYG982391099 - Common Stock
17.81 USD
-0.07 (-0.39%)
17.85 USD
+0.04 (+0.22%)
We assign a fundamental rating of 4 out of 10 to XP. XP was compared to 239 industry peers in the Capital Markets industry. XP has a medium profitability rating, but doesn't score so well on its financial health evaluation. XP is growing strongly while it also seems undervalued. This is an interesting combination
1. Profitability
1.1 Basic Checks
XP had positive earnings in the past year.
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
XP's Return On Assets of 1.32% is on the low side compared to the rest of the industry. XP is outperformed by 62.34% of its industry peers.
XP has a Return On Equity of 22.10%. This is amongst the best in the industry. XP outperforms 89.12% of its industry peers.
With a Return On Invested Capital value of 1.25%, XP is not doing good in the industry: 68.20% of the companies in the same industry are doing better.
XP had an Average Return On Invested Capital over the past 3 years of 1.49%. This is significantly below the industry average of 7.59%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.32% | ||
| ROE | 22.1% | ||
| ROIC | 1.25% |
ROA(3y)1.58%
ROA(5y)1.89%
ROE(3y)21.19%
ROE(5y)21.51%
ROIC(3y)1.49%
ROIC(5y)1.78%
1.3 Margins
The Profit Margin of XP (28.02%) is better than 72.38% of its industry peers.
In the last couple of years the Profit Margin of XP has grown nicely.
XP has a Operating Margin of 33.11%. This is comparable to the rest of the industry: XP outperforms 58.16% of its industry peers.
XP's Operating Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.11% | ||
| PM (TTM) | 28.02% | ||
| GM | N/A |
OM growth 3Y0.94%
OM growth 5Y1.22%
PM growth 3Y-3.75%
PM growth 5Y4.69%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
XP has less shares outstanding than it did 1 year ago.
The number of shares outstanding for XP has been reduced compared to 5 years ago.
XP has a worse debt/assets ratio than last year.
2.2 Solvency
XP has an Altman-Z score of 0.04. This is a bad value and indicates that XP is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 0.04, XP is not doing good in the industry: 74.06% of the companies in the same industry are doing better.
The Debt to FCF ratio of XP is 9.13, which is on the high side as it means it would take XP, 9.13 years of fcf income to pay off all of its debts.
XP's Debt to FCF ratio of 9.13 is in line compared to the rest of the industry. XP outperforms 56.07% of its industry peers.
XP has a Debt/Equity ratio of 4.06. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 4.06, XP is not doing good in the industry: 83.68% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.06 | ||
| Debt/FCF | 9.13 | ||
| Altman-Z | 0.04 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.20 indicates that XP may have some problems paying its short term obligations.
XP's Current ratio of 0.20 is on the low side compared to the rest of the industry. XP is outperformed by 88.28% of its industry peers.
A Quick Ratio of 0.20 indicates that XP may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.20, XP is doing worse than 88.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.2 | ||
| Quick Ratio | 0.2 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 8.65% over the past year.
XP shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 33.24% yearly.
The Revenue has been growing slightly by 6.74% in the past year.
XP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 27.13% yearly.
EPS 1Y (TTM)8.65%
EPS 3Y7.19%
EPS 5Y33.24%
EPS Q2Q%20.59%
Revenue 1Y (TTM)6.74%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%5.6%
3.2 Future
The Earnings Per Share is expected to grow by 13.23% on average over the next years. This is quite good.
Based on estimates for the next years, XP will show a quite strong growth in Revenue. The Revenue will grow by 13.27% on average per year.
EPS Next Y13.69%
EPS Next 2Y13.51%
EPS Next 3Y13.23%
EPS Next 5YN/A
Revenue Next Year8.47%
Revenue Next 2Y10.7%
Revenue Next 3Y11.24%
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.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
XP is valuated reasonably with a Price/Earnings ratio of 10.60.
69.87% of the companies in the same industry are more expensive than XP, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of XP to the average of the S&P500 Index (26.84), we can say XP is valued rather cheaply.
XP is valuated reasonably with a Price/Forward Earnings ratio of 8.75.
84.10% of the companies in the same industry are more expensive than XP, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.48. XP is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.6 | ||
| Fwd PE | 8.75 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, XP is valued cheaply inside the industry as 91.63% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, XP is valued cheaply inside the industry as 82.85% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.01 | ||
| EV/EBITDA | 7.81 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as XP's earnings are expected to grow with 13.23% in the coming years.
PEG (NY)0.77
PEG (5Y)0.32
EPS Next 2Y13.51%
EPS Next 3Y13.23%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 16.02%, XP is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 7.91, XP pays a better dividend. On top of this XP pays more dividend than 92.05% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, XP pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 16.02% |
5.2 History
XP is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
41.40% of the earnings are spent on dividend by XP. This is a bit on the high side, but may be sustainable.
DP41.4%
EPS Next 2Y13.51%
EPS Next 3Y13.23%
17.81
-0.07 (-0.39%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners85.5%
Inst Owner Change-2.89%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap9.40B
Analysts81.11
Price Target22.95 (28.86%)
Short Float %6.04%
Short Ratio4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 16.02% |
Yearly Dividend0.69
Dividend Growth(5Y)N/A
DP41.4%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.66%
Min EPS beat(2)1.46%
Max EPS beat(2)1.86%
EPS beat(4)2
Avg EPS beat(4)-0.19%
Min EPS beat(4)-2.46%
Max EPS beat(4)1.86%
EPS beat(8)6
Avg EPS beat(8)0.77%
EPS beat(12)9
Avg EPS beat(12)1.96%
EPS beat(16)13
Avg EPS beat(16)4.8%
Revenue beat(2)0
Avg Revenue beat(2)-5.2%
Min Revenue beat(2)-5.74%
Max Revenue beat(2)-4.66%
Revenue beat(4)0
Avg Revenue beat(4)-4.3%
Min Revenue beat(4)-5.74%
Max Revenue beat(4)-3.04%
Revenue beat(8)1
Avg Revenue beat(8)-2.41%
Revenue beat(12)2
Avg Revenue beat(12)-2.87%
Revenue beat(16)2
Avg Revenue beat(16)-3.8%
PT rev (1m)-0.88%
PT rev (3m)22.95%
EPS NQ rev (1m)3.27%
EPS NQ rev (3m)12.83%
EPS NY rev (1m)0.99%
EPS NY rev (3m)2.01%
Revenue NQ rev (1m)-0.43%
Revenue NQ rev (3m)-1.11%
Revenue NY rev (1m)-0.53%
Revenue NY rev (3m)-1.44%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.6 | ||
| Fwd PE | 8.75 | ||
| P/S | 2.92 | ||
| P/FCF | 5.01 | ||
| P/OCF | 4.82 | ||
| P/B | 2.3 | ||
| P/tB | 2.62 | ||
| EV/EBITDA | 7.81 |
EPS(TTM)1.68
EY9.43%
EPS(NY)2.04
Fwd EY11.43%
FCF(TTM)3.56
FCFY19.98%
OCF(TTM)3.69
OCFY20.73%
SpS6.1
BVpS7.73
TBVpS6.81
PEG (NY)0.77
PEG (5Y)0.32
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.32% | ||
| ROE | 22.1% | ||
| ROCE | 2.05% | ||
| ROIC | 1.25% | ||
| ROICexc | 1.29% | ||
| ROICexgc | 1.75% | ||
| OM | 33.11% | ||
| PM (TTM) | 28.02% | ||
| GM | N/A | ||
| FCFM | 58.35% |
ROA(3y)1.58%
ROA(5y)1.89%
ROE(3y)21.19%
ROE(5y)21.51%
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-15.13%
OM growth 3Y0.94%
OM growth 5Y1.22%
PM growth 3Y-3.75%
PM growth 5Y4.69%
GM growth 3YN/A
GM growth 5YN/A
F-Score6
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.06 | ||
| Debt/FCF | 9.13 | ||
| Debt/EBITDA | 14.85 | ||
| Cap/Depr | 137.12% | ||
| Cap/Sales | 2.2% | ||
| Interest Coverage | 16.42 | ||
| Cash Conversion | 174.43% | ||
| Profit Quality | 208.2% | ||
| Current Ratio | 0.2 | ||
| Quick Ratio | 0.2 | ||
| Altman-Z | 0.04 |
F-Score6
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)87.96%
Cap/Depr(5y)123.94%
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)8.65%
EPS 3Y7.19%
EPS 5Y33.24%
EPS Q2Q%20.59%
EPS Next Y13.69%
EPS Next 2Y13.51%
EPS Next 3Y13.23%
EPS Next 5YN/A
Revenue 1Y (TTM)6.74%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%5.6%
Revenue Next Year8.47%
Revenue Next 2Y10.7%
Revenue Next 3Y11.24%
Revenue Next 5Y13.27%
EBIT growth 1Y10.66%
EBIT growth 3Y13.19%
EBIT growth 5Y28.69%
EBIT Next Year14.55%
EBIT Next 3Y14.92%
EBIT Next 5Y18.63%
FCF growth 1Y60.25%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y62.72%
OCF growth 3YN/A
OCF growth 5YN/A