XP INC - CLASS A (XP) Stock Fundamental Analysis
NASDAQ:XP - Nasdaq - KYG982391099 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to XP. XP was compared to 232 industry peers in the Capital Markets industry. There are concerns on the financial health of XP while its profitability can be described as average. XP has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare combination!
1. Profitability
1.1 Basic Checks
In the past year XP was profitable.
XP had a positive operating cash flow in the past year.
Each year in the past 5 years XP has been profitable.
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 1.30%, XP is doing worse than 61.47% of the companies in the same industry.
XP's Return On Equity of 22.52% is amongst the best of the industry. XP outperforms 91.77% of its industry peers.
XP has a worse Return On Invested Capital (1.32%) than 68.40% of its industry peers.
The Average Return On Invested Capital over the past 3 years for XP is significantly below the industry average of 7.24%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.3% | ||
| ROE | 22.52% | ||
| ROIC | 1.32% |
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
The Profit Margin of XP (26.50%) is better than 67.53% 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 33.58%, XP is in the better half of the industry, outperforming 60.17% of the companies in the same industry.
In the last couple of years the Operating Margin of XP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 33.58% | ||
| PM (TTM) | 26.5% | ||
| 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
The number of shares outstanding for XP has been reduced compared to 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 0.01, we must say that XP is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.01, XP is not doing good in the industry: 75.76% of the companies in the same industry are doing better.
XP has a debt to FCF ratio of 8.83. This is a slightly negative value and a sign of low solvency as XP would need 8.83 years to pay back of all of its debts.
With a Debt to FCF ratio value of 8.83, XP perfoms like the industry average, outperforming 51.52% of the companies in the same industry.
A Debt/Equity ratio of 4.61 is on the high side and indicates that XP has dependencies on debt financing.
With a Debt to Equity ratio value of 4.61, XP is not doing good in the industry: 83.55% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.61 | ||
| Debt/FCF | 8.83 | ||
| Altman-Z | 0.01 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 0.12 indicates that XP may have some problems paying its short term obligations.
XP's Current ratio of 0.12 is on the low side compared to the rest of the industry. XP is outperformed by 89.61% of its industry peers.
XP has a Quick Ratio of 0.12. This is a bad value and indicates that XP is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of XP (0.12) is worse than 89.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.12 | ||
| Quick Ratio | 0.12 |
3. Growth
3.1 Past
XP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.17%.
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
The Earnings Per Share is expected to grow by 12.72% 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 Y11.45%
EPS Next 2Y12.61%
EPS Next 3Y12.72%
EPS Next 5YN/A
Revenue Next Year10.06%
Revenue Next 2Y11.35%
Revenue Next 3Y11.45%
Revenue Next 5Y13.27%
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.
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
With a Price/Earnings ratio of 12.57, XP is valued correctly.
XP's Price/Earnings ratio is a bit cheaper when compared to the industry. XP is cheaper than 61.47% of the companies in the same industry.
XP's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.25.
XP is valuated reasonably with a Price/Forward Earnings ratio of 10.07.
Based on the Price/Forward Earnings ratio, XP is valued a bit cheaper than the industry average as 70.13% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of XP to the average of the S&P500 Index (22.15), we can say XP is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.57 | ||
| Fwd PE | 10.07 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, XP is valued cheaper than 87.01% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, XP is valued cheaper than 83.98% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.36 | ||
| EV/EBITDA | 10.18 |
4.3 Compensation for Growth
XP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as XP's earnings are expected to grow with 12.72% in the coming years.
PEG (NY)1.1
PEG (5Y)0.38
EPS Next 2Y12.61%
EPS Next 3Y12.72%
5. Dividend
5.1 Amount
XP has a Yearly Dividend Yield of 13.66%, which is a nice return.
Compared to an average industry Dividend Yield of 8.14, XP pays a better dividend. On top of this XP pays more dividend than 85.28% of the companies listed in the same industry.
XP's Dividend Yield is rather good when compared to the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.66% |
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
45.13% of the earnings are spent on dividend by XP. This is a bit on the high side, but may be sustainable.
DP45.13%
EPS Next 2Y12.61%
EPS Next 3Y12.72%
19.36
+0.11 (+0.57%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners81.82%
Inst Owner Change1.31%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap10.22B
Analysts78.89
Price Target18.67 (-3.56%)
Short Float %4%
Short Ratio1.81
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 13.66% |
Yearly Dividend0.66
Dividend Growth(5Y)N/A
DP45.13%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.04%
Min EPS beat(2)-2.46%
Max EPS beat(2)-1.63%
EPS beat(4)2
Avg EPS beat(4)0.21%
Min EPS beat(4)-2.46%
Max EPS beat(4)3.31%
EPS beat(8)6
Avg EPS beat(8)1.8%
EPS beat(12)9
Avg EPS beat(12)2.72%
EPS beat(16)13
Avg EPS beat(16)9.18%
Revenue beat(2)0
Avg Revenue beat(2)-3.4%
Min Revenue beat(2)-3.77%
Max Revenue beat(2)-3.04%
Revenue beat(4)0
Avg Revenue beat(4)-2.57%
Min Revenue beat(4)-3.77%
Max Revenue beat(4)-1.17%
Revenue beat(8)1
Avg Revenue beat(8)-1.53%
Revenue beat(12)2
Avg Revenue beat(12)-3.31%
Revenue beat(16)4
Avg Revenue beat(16)-2.65%
PT rev (1m)1.1%
PT rev (3m)1.67%
EPS NQ rev (1m)0.34%
EPS NQ rev (3m)-0.8%
EPS NY rev (1m)1.16%
EPS NY rev (3m)-0.11%
Revenue NQ rev (1m)-0.26%
Revenue NQ rev (3m)0.96%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)-1.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.57 | ||
| Fwd PE | 10.07 | ||
| P/S | 3.41 | ||
| P/FCF | 5.36 | ||
| P/OCF | 5.2 | ||
| P/B | 2.9 | ||
| P/tB | 3.34 | ||
| EV/EBITDA | 10.18 |
EPS(TTM)1.54
EY7.95%
EPS(NY)1.92
Fwd EY9.93%
FCF(TTM)3.61
FCFY18.67%
OCF(TTM)3.72
OCFY19.24%
SpS5.67
BVpS6.68
TBVpS5.8
PEG (NY)1.1
PEG (5Y)0.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.3% | ||
| ROE | 22.52% | ||
| ROCE | 2.25% | ||
| ROIC | 1.32% | ||
| ROICexc | 1.34% | ||
| ROICexgc | 1.79% | ||
| OM | 33.58% | ||
| PM (TTM) | 26.5% | ||
| GM | N/A | ||
| FCFM | 63.7% |
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-Score5
Asset Turnover0.05
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.61 | ||
| Debt/FCF | 8.83 | ||
| Debt/EBITDA | 15.45 | ||
| Cap/Depr | 124.46% | ||
| Cap/Sales | 1.94% | ||
| Interest Coverage | 16.37 | ||
| Cash Conversion | 186.83% | ||
| Profit Quality | 240.37% | ||
| Current Ratio | 0.12 | ||
| Quick Ratio | 0.12 | ||
| Altman-Z | 0.01 |
F-Score5
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 Y11.45%
EPS Next 2Y12.61%
EPS Next 3Y12.72%
EPS Next 5YN/A
Revenue 1Y (TTM)9.78%
Revenue growth 3Y12.14%
Revenue growth 5Y27.13%
Sales Q2Q%7.2%
Revenue Next Year10.06%
Revenue Next 2Y11.35%
Revenue Next 3Y11.45%
Revenue Next 5Y13.27%
EBIT growth 1Y26.82%
EBIT growth 3Y13.19%
EBIT growth 5Y28.68%
EBIT Next Year16.64%
EBIT Next 3Y14.32%
EBIT Next 5Y18.63%
FCF growth 1Y36.79%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y37.55%
OCF growth 3YN/A
OCF growth 5YN/A