XP (NasdaqGS:XP) is back in focus after reporting second quarter 2026 results that included 8% revenue growth, a 117% jump in its corporate segment and return on equity of 22.5%.
XP shares have responded to the recent earnings release and buyback updates, with a 1 week share price return of 12.37% and a year to date share price return of 10.01%. However, the 5 year total shareholder return is still down 58.42%, which suggests short term momentum has picked up while longer term holders remain under water.
Capitalize on XP's renewed momentum by reviewing a hand picked 49 high quality undervalued stocks that also show solid balance sheets and cash generation.The question now is simple. After XP's sharp bounce and buyback support, does the current price still offer an appealing balance of risk and potential reward as the valuation numbers come into focus next?
Most Popular Narrative: 23.2% Undervalued
XP closed at $17.80 while the most followed narrative pegs fair value at $23.17, which implies a sizeable valuation gap that hinges on execution of its long term growth plans.
XP's continued diversification of its product suite, including early-stage growth in insurance, retirement, cards, FX, global investments, and the newly launched consortium business, enables deeper client cross-sell and higher revenue per customer, pointing to meaningful top-line expansion and improved earnings resiliency.
Want to see what kind of revenue trajectory and margin profile XP would need to support that fair value and how future earnings multiples tie it all together?
Result: Fair Value of $23.17 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, XP's story can change quickly if competition pressures fees or if higher spending on marketing and technology weighs more heavily on future profitability.
Find out about the key risks to this XP narrative.
Next Steps
Given the mix of optimism and caution around XP, it makes sense to check the underlying data yourself and weigh the trade off directly. To see what others view as the key positives that support the thesis, review the 5 key rewards.
Looking for more investment ideas beyond XP?
If XP has you rethinking your portfolio, do not stop here. Use a few focused screens to surface other stocks that fit the kind of profile you want.
- Target stability and downside protection by scanning a 74 resilient stocks with low risk scores that may help you avoid companies with fragile fundamentals.
- Hunt for compelling price tags by reviewing a 49 high quality undervalued stocks that could highlight stocks trading below their estimated worth.
- Spot potential future leaders early by checking a 18 high quality undiscovered gems before they attract broader market attention.
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.
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