Yahoo Finance Here's What Analysts Are Forecasting For XP Inc. (NASDAQ:XP) After Its First-Quarter Results
It's been a sad week for XP Inc. (NASDAQ:XP), who've watched their investment drop 14% to US$18.68 in the week since the company reported its first-quarter result. It was an okay report, and revenues came in at R$4.1b, approximately in line with analyst estimates leading up to the results announcement. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for XP
Taking into account the latest results, the consensus forecast from XP's seven analysts is for revenues of R$17.1b in 2024. This reflects a notable 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 11% to R$8.35. In the lead-up to this report, the analysts had been modelling revenues of R$17.3b and earnings per share (EPS) of R$8.51 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$28.46, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on XP, with the most bullish analyst valuing it at US$32.69 and the most bearish at US$21.80 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that XP's rate of growth is expected to accelerate meaningfully, with the forecast 18% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that XP is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$28.46, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on XP. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for XP going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for XP that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
