XP Inc. (XP)

Price$20.88Cached quoteAs of 2026-09-24 06:31 UTC

AI: Fair-priced

Price checkXP looks fairly priced because strong profits are offset by high rates and slower client growth.

XP trades at roughly nine times its latest annual earnings, a reasonable rather than distressed valuation for a business whose annualized return on average equity reached 22.5% in the second quarter. XP's active clients grew only 1% and its retail revenue earned relative to client assets slipped to 1.20% from 1.25%, while Brazil's 14% benchmark rate keeps the hurdle for investors high, supporting a Fair-priced verdict.

Big pictureXP has grown profits steadily, although its reported cash movements remain unusually volatile for investors to interpret.

XP's net income rose from R$2.08 billion in 2020 to R$4.51 billion in 2024 and R$5.17 billion in 2025, showing durable profit growth. XP's operating cash flow swung from negative R$4.02 billion in 2021 to R$11.18 billion in 2024, but customer and trading balances make that measure less informative for XP than earnings and regulatory capital.

Business strengthXP combines strong regulatory capital with continuing shareholder payouts and a declining share count.

XP ended 2024 with R$12.9 billion of cash and R$1.7 billion of debt, while its second-quarter 2026 overall capital ratio was 20.3%, above XP's 16%-19% target range, and its core common-equity ratio was 17.1%. XP also repurchased about R$1 billion of shares in the first half of 2026 and later cancelled 11.79 million treasury shares, extending the share-count reduction visible in the supplied SEC history despite ongoing stock compensation.

What could change the storyXP needs stronger client economics for meaningful upside, while weaker monetization or credit quality would undermine today's valuation.

XP can justify a higher valuation if strong inflows convert into faster revenue growth: second-quarter client assets rose 12%, net inflow reached R$28 billion, funds revenue rose 23%, and wholesale revenue rose 32%. XP would deserve a lower valuation if active-client growth stays near 1%, its retail revenue rate keeps falling, or credit losses rise as lending expands, because the current roughly nine-times-earnings valuation assumes profits remain durable and grow at least modestly.

AI: News

Second-quarter earningsXP delivered higher profit and much stronger inflows, but weak client growth tempered the otherwise solid quarter.

On August 17, XP reported second-quarter net income of R$1.38 billion, up 5%, client assets of R$1.535 trillion, up 12%, and net inflow of R$28 billion versus R$10 billion a year earlier. XP shares rose over the following sessions, but the move cannot be attributed to earnings alone because XP simultaneously announced a large treasury-share cancellation and other market factors also affected trading.

Treasury shares cancelledXP permanently removed 2.3% of total shares, increasing each remaining share's claim on future earnings.

On August 17, XP cancelled 11,791,755 Class A treasury shares, cutting total shares from 520,292,030 to 508,500,275 without using new cash at that moment because XP had already repurchased them. The cancellation locks in the per-share benefit of XP's earlier buybacks and reduces the possibility that those treasury shares return to circulation.

Dividend and buybackXP paired a cash dividend with another buyback authorization, signaling continued distribution of surplus capital to owners.

On May 18, XP declared a US$0.20-per-share dividend expected to distribute about R$500 million and authorized up to R$1.0 billion of additional Class A repurchases through May 2027. XP later said first-half repurchases were about R$1 billion and that its overall capital ratio could move toward a 16%-19% target through distributions, linking shareholder returns to excess regulatory capital.

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017
Revenue	R$7.97B	R$7.42B	R$6.53B	R$5.94B	R$6.20B	R$5.02B	R$3.60B	R$2.05B	R$1.28B
Operating expenses	R$6.59B	R$5.06B	R$4.40B	R$3.87B	R$3.43B	R$2.65B	R$2.05B	R$1.27B	R$682.5M
Operating income	−R$4.52B	−R$3.92B	−R$3.86B	−R$3.56B	—	—	—	—	—
Operating margin	−56.70%	−52.74%	−59.17%	−59.98%	—	—	—	—	—
EBITDA	R$6.38B	R$6.03B	R$4.81B	R$4.05B	—	—	—	—	—
EBITDA margin	80.06%	81.22%	73.58%	68.22%	—	—	—	—	—
Net income	R$5.17B	R$4.51B	R$3.90B	R$3.58B	R$3.59B	R$2.08B	R$1.09B	R$465.3M	R$423.5M
Net profit margin	64.89%	60.81%	59.70%	60.27%	57.98%	41.49%	30.30%	22.65%	33.00%
Basic EPSper basic share	R$9.80	R$8.33	R$7.22	R$6.44	R$6.42	R$3.76	R$2.11	R$0.94	R$0.85
Diluted EPSper diluted share	R$9.72	R$8.23	R$7.16	R$6.25	R$6.26	R$3.71	R$2.11	R$0.94	R$0.85