XP (NASDAQ:XP) Posts Earnings Results, Beats Expectations By $0.03 EPS

Key Points

• XP reported quarterly EPS of $0.53, beating the consensus estimate of $0.50 by $0.03. The company posted a 27.40% net margin and a 22.51% return on equity.
• Shares fell 0.8% to $15.70, with XP valued at approximately $8.44 billion and trading at a P/E ratio of 8.67. The stock remains below its 50-day and 200-day moving averages.
• Analysts maintain a “Moderate Buy” consensus with a $23.33 price target, although Zacks downgraded the stock to “hold” and UBS lowered its target to $25. Institutional investors own 59.15% of XP.

XP (NASDAQ:XP - Get Free Report) released its earnings results on Monday. The company reported $0.53 EPS for the quarter, beating the consensus estimate of $0.50 by $0.03, Zacks reports. XP had a net margin of 27.40% and a return on equity of 22.51%.

XP Trading Down 0.8%

NASDAQ:XP traded down $0.12 during midday trading on Monday, reaching $15.70. 5,733,471 shares of the stock traded hands, compared to its average volume of 5,900,312. The stock has a market capitalization of $8.44 billion, a P/E ratio of 8.67, a PEG ratio of 0.46 and a beta of 1.10. The company has a debt-to-equity ratio of 0.02, a quick ratio of 6.66 and a current ratio of 6.66. The company has a fifty day moving average of $16.22 and a 200 day moving average of $18.15. XP has a 12 month low of $14.80 and a 12 month high of $23.13.

Analyst Upgrades and Downgrades

XP has been the subject of several recent research reports. Zacks Research downgraded shares of XP from a "strong-buy" rating to a "hold" rating in a research note on Friday, May 1st. UBS Group reduced their price objective on XP from $28.00 to $25.00 and set a "buy" rating on the stock in a research note on Wednesday, June 3rd. Finally, Weiss Ratings upgraded XP from a "hold (c)" rating to a "hold (c+)" rating in a report on Tuesday, May 26th. Three equities research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company. According to MarketBeat, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $23.33.

Hedge Funds Weigh In On XP

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Inspire Advisors LLC purchased a new stake in shares of XP in the 4th quarter worth about $221,000. PCM Encore LLC bought a new position in XP in the fourth quarter worth about $209,000. Bridgefront Capital LLC raised its stake in XP by 33.5% in the fourth quarter. Bridgefront Capital LLC now owns 16,725 shares of the company's stock worth $274,000 after buying an additional 4,199 shares in the last quarter. Federation des caisses Desjardins du Quebec lifted its holdings in XP by 11.9% in the fourth quarter. Federation des caisses Desjardins du Quebec now owns 16,292 shares of the company's stock worth $267,000 after buying an additional 1,728 shares during the period. Finally, Orion Porfolio Solutions LLC lifted its holdings in XP by 10.9% in the fourth quarter. Orion Porfolio Solutions LLC now owns 17,777 shares of the company's stock worth $291,000 after buying an additional 1,752 shares during the period. Institutional investors own 59.15% of the company's stock.

XP announced that its board has approved a share buyback plan on Tuesday, May 19th that permits the company to buyback $0.00 in shares. This buyback authorization permits the company to repurchase shares of its stock through open market purchases. Stock buyback plans are often a sign that the company's leadership believes its stock is undervalued.

About XP

XP Inc provides financial products and services in Brazil. It offers securities brokerage, private pension plans, commercial, and investment banking products, such as loan operations and transactions in the foreign exchange markets and deposits; product structuring and capital markets services for corporate clients and issuers of fixed income products; advisory services for mass-affluent and institutional clients; and wealth management services for high-net-worth customers and institutional clients.

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