Key Stats for XP Stock
- This-Week Performance: -7%
- 52-Week Range: $16 to $23
- Valuation Model Target Price: about $34
- Implied Upside: about 70%
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What Happened?
XP Inc. stock fell about 7% over the past week, finishing near $20 per share as investors pulled back from Brazilian financial platforms, with sentiment across the sector weighed down by ongoing uncertainty around interest rates and cautious positioning in risk assets.
The stock declined primarily because higher and more volatile interest rates in Brazil continue to reduce client activity on investment platforms, slowing trading volumes and net inflows, which directly pressures XP’s near-term revenue growth and keeps investors cautious despite solid underlying results.
In its latest earnings update, XP reported 2025 gross revenue of BRL 19.5 billion, up 8% year over year, with adjusted net income rising 15% to BRL 5.2 billion and total client assets reaching BRL 2.1 trillion, up 22%, while its Corporate & Issuer Services segment, which includes capital markets and investment banking activities, delivered record quarterly revenue of BRL 895 million, up 49% year over year, which CFO Victor Mansur described as “the strongest performance in our history for this business.”
Despite these results, the broader environment remains challenging, with competitors such as BTG Pactual, Itaú Unibanco, and Nubank operating in the same macro environment of muted retail activity and continued pressure on client investment flows, reinforcing the view that a recovery in investor engagement across the industry will be key for XP shares to move higher.
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Is XP Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): about 13%
- Operating Margins: about 32%
- Exit P/E Multiple: about 9x
XP’s growth outlook is driven by rising client assets and deeper engagement across its platform, particularly as more users adopt advisory services, retirement products, and credit offerings that generate more stable and recurring revenue compared to transaction-based trading.
The company is also benefiting from a structural shift in Brazil, where individual investors are gradually moving away from traditional banks toward independent platforms, positioning XP alongside peers like BTG Pactual and Nubank in capturing long-term share of wallet in financial services.
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This supports a model where growth is driven by higher client monetization, cross-selling across products like insurance and credit, and improved productivity from its adviser network as technology and AI tools scale across the platform.
Based on these inputs, the model estimates a target price of about $34, implying about 70% total upside over roughly 2.7 years, indicating the stock appears undervalued at current levels.
Over the next 12 months, performance will be driven by client inflows, stabilization in interest rates, and XP’s ability to expand margins as operating leverage improves, making execution on growth and profitability the key driver of returns.
How Much Upside Does XP Stock Have From Here?
Investors can estimate XP’s potential share price, or what any stock could be worth, in under a minute using TIKR’s New Valuation Model tool.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
