Fact based stock research
XP (NasdaqGS:XP)

KYG982391099

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

XP stock research in summary

xpinc.com

ANALYSIS: With an Obermatt Combined Rank of 76 (better than 76% compared with investment alternatives), XP (Investment Banking & Brokerage, Brazil) shares have much better financial characteristics than comparable stocks. Shares of XP are a good value (attractively priced) with a consolidated Value Rank of 57 (better than 57% of alternatives), are safely financed (Safety Rank of 76, which means low debt burdens), but show below-average growth (Growth Rank of 49). ...read more

RECOMMENDATION: A Combined Rank of 76, is a strong buy recommendation based on XP's financial characteristics. As the company XP's key financial metrics exhibit good value (Obermatt Value Rank of 57) but low growth (Obermatt Growth Rank of 49) while being safely financed (Obermatt Safety Rank of 76), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 57% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	57
Growth Rank	49
Safety Rank	76
Combined Rank	76

Country	Brazil
Industry	Investment Banking & Brokerage
Index	NASDAQ
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: XP

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	5	33	57
GROWTH
GROWTH	63	55	89	49
SAFETY
SAFETY	53	64	75	76
SENTIMENT
SENTIMENT	n/a	67	53	^new
360° VIEW
360° VIEW	n/a	35	75	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better XP is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	1	5	33	57
GROWTH
GROWTH	63	55	89	49
SAFETY
SAFETY	53	64	75	76
COMBINED
COMBINED	23	24	84	76

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of XP the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 57 (better than 57% compared with alternatives), XP shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for XP. Price-to-Sales (P/S) is 52, which means that the stock price compared with what market professionals expect for future sales is lower than for 52% of comparable companies, indicating a good value concerning XP's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 54% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 83 (dividends are expected to be higher than 83% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 65% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for XP to 35. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 57, is a buy recommendation based on XP's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	16	28	43	52
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	35	19	40	54
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	8	22	28	35
DIVIDEND YIELD
DIVIDEND YIELD	1	1	40	83
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	1	5	33	57

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of XP; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), XP shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for XP. Sales Growth has a rank of 84 which means that currently, professionals expect the company to grow more than 84% of its competitors. Capital Growth is also above 37% of competitors with a rank of 71. But Profit Growth only has a rank of 37, which means that currently professionals expect the company to grow its profits less than 63% of its competitors. And Stock Returns have also been below average with a rank of only 5. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	83	96	79	84
PROFIT GROWTH
PROFIT GROWTH	n/a	71	21	37
CAPITAL GROWTH
CAPITAL GROWTH	n/a	34	93	71
STOCK RETURNS
STOCK RETURNS	29	7	95	5
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	63	55	89	49

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of XP.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 76 (better than 76% compared with alternatives) for 2024, the company XP has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of XP is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for XP. Refinancing is at 93, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 93% of its competitors. Liquidity is also good at 61, meaning the company generates more profit to service its debt than 61% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 31, which means the company has an above-average debt-to-equity ratio. It has more debt than 69% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 76 (better than 76% compared with alternatives), XP has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and XP could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with XP and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	73	22	25	31
REFINANCING
REFINANCING	4	63	83	93
LIQUIDITY
LIQUIDITY	80	86	74	61
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	53	64	75	76

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of XP and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	28	71	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	91	11	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	n/a	90	^new
MARKET PULSE
MARKET PULSE	n/a	57	52	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	67	53	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for XP.
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