XP INC - CLASS A (XP)
KYG982391099 - Common Stock
We assign a fundamental rating of 4 out of 10 to XP. XP was compared to 212 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 has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
XP had positive earnings in the past year.
XP had a positive operating cash flow in the past year.
XP had positive earnings in each of the past 5 years.
The reported operating cash flow has been mixed in the past 5 years: XP reported negative operating cash flow in multiple years.
1.2 Ratios
XP has a Return On Assets of 1.56%. This is in the lower half of the industry: XP underperforms 61.24% of its industry peers.
With an excellent Return On Equity value of 18.18%, XP belongs to the best of the industry, outperforming 81.34% of the companies in the same industry.
XP has a Return On Invested Capital of 1.46%. This is in the lower half of the industry: XP underperforms 75.12% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for XP is significantly below the industry average of 10.84%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.56% | ||
| ROE | 18.18% | ||
| ROIC | 1.46% |
ROA(3y)2%
ROA(5y)2.13%
ROE(3y)21.98%
ROE(5y)20.02%
ROIC(3y)1.8%
ROIC(5y)2.12%
1.3 Margins
XP has a better Profit Margin (26.01%) than 61.72% of its industry peers.
In the last couple of years the Profit Margin of XP has grown nicely.
XP has a Operating Margin (30.29%) which is in line with its industry peers.
XP's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 30.29% | ||
| PM (TTM) | 26.01% | ||
| GM | N/A |
OM growth 3Y-0.89%
OM growth 5Y4.58%
PM growth 3Y1%
PM growth 5Y10.98%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
XP has more 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 better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 0.16, we must say that XP is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.16, XP is not doing good in the industry: 75.60% of the companies in the same industry are doing better.
The Debt to FCF ratio of XP is 11.84, which is on the high side as it means it would take XP, 11.84 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of XP (11.84) is comparable to the rest of the industry.
XP has a Debt/Equity ratio of 2.93. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 2.93, XP is doing worse than 78.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.93 | ||
| Debt/FCF | 11.84 | ||
| Altman-Z | 0.16 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
XP has a Current Ratio of 0.16. This is a bad value and indicates that XP is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.16, XP is not doing good in the industry: 88.52% of the companies in the same industry are doing better.
XP has a Quick Ratio of 0.16. This is a bad value and indicates that XP is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.16, XP is doing worse than 83.73% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.16 | ||
| Quick Ratio | 0.16 |
3. Growth
3.1 Past
XP shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -3.08%.
XP shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 53.51% yearly.
XP shows a small growth in Revenue. In the last year, the Revenue has grown by 4.18%.
XP shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 38.11% yearly.
EPS 1Y (TTM)-3.08%
EPS 3Y24.1%
EPS 5Y53.51%
EPS growth Q2Q3.4%
Revenue 1Y (TTM)4.18%
Revenue growth 3Y22.16%
Revenue growth 5Y38.11%
Revenue growth Q2Q14.13%
3.2 Future
The Earnings Per Share is expected to grow by 17.08% 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 17.64% on average per year.
EPS Next Y15.89%
EPS Next 2Y18.14%
EPS Next 3Y17.08%
EPS Next 5YN/A
Revenue Next Year19.73%
Revenue Next 2Y18.72%
Revenue Next 3Y17.64%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in 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
A Price/Earnings ratio of 15.82 indicates a correct valuation of XP.
Compared to the rest of the industry, the Price/Earnings ratio of XP is on the same level as its industry peers.
The average S&P500 Price/Earnings ratio is at 28.05. XP is valued slightly cheaper when compared to this.
XP is valuated correctly with a Price/Forward Earnings ratio of 12.71.
The rest of the industry has a similar Price/Forward Earnings ratio as XP.
When comparing the Price/Forward Earnings ratio of XP to the average of the S&P500 Index (20.30), we can say XP is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.82 | ||
| Fwd PE | 12.71 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of XP indicates a somewhat cheap valuation: XP is cheaper than 73.21% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, XP is valued a bit cheaper than the industry average as 69.86% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.09 | ||
| EV/EBITDA | 14.91 |
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 17.08% in the coming years. This may justify a more expensive valuation.
PEG (NY)1
PEG (5Y)0.3
EPS Next 2Y18.14%
EPS Next 3Y17.08%
5. Dividend
5.1 Amount
XP has a Yearly Dividend Yield of 12.45%, which is a nice return.
XP's Dividend Yield is rather good when compared to the industry average which is at 7.27. XP pays more dividend than 88.04% of the companies in the same industry.
XP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 12.45% |
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
DPN/A
EPS Next 2Y18.14%
EPS Next 3Y17.08%
XP INC - CLASS A
NASDAQ:XP (5/8/2024, 7:00:03 PM)
After market: 21.87 -0.59 (-2.63%)22.46
+0.35 (+1.58%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap12.32B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 12.45% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
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EPS NY rev (3m)
Revenue NQ rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.82 | ||
| Fwd PE | 12.71 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)1
PEG (5Y)0.3
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.56% | ||
| ROE | 18.18% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 30.29% | ||
| PM (TTM) | 26.01% | ||
| GM | N/A | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.06
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.93 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.16 | ||
| Quick Ratio | 0.16 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-3.08%
EPS 3Y24.1%
EPS 5Y
EPS growth Q2Q
EPS Next Y15.89%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)4.18%
Revenue growth 3Y22.16%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
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EBIT Next 5Y
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