XP (XP) is back in focus after management outlined an ambition to reach R$4 trillion in assets under custody and management by 2033, while targeting double digit revenue growth across a broader earnings base.

XP’s recent plan to target R$4 trillion in assets comes after a mixed share price performance, with a roughly 7.3% 1 month share price return but a decline of about 15.5% over three months, and a 5 year total shareholder return that has fallen around 53.8%. This suggests the latest ambition is arriving as the market is still reassessing longer term prospects.

If XP’s renewed growth push has you thinking about where else capital could go to work, it might be a good moment to broaden your search with the 18 top founder-led companies

XP looks like a substantial business today, with R$18,177.301 million in revenue and R$5,243.992 million in net income. However, after the recent ambition to reach R$4 trillion in assets, is the current share price already reflecting that?

Most Popular Narrative: 30% Undervalued

XP's most followed narrative places fair value at $23.97, above the last close of $16.69, and builds a case around steady earnings power and cash returns.

Analysts expect earnings to reach R$7.3 billion (and earnings per share of R$13.16) by about June 2029, up from R$5.2 billion today. The analysts are largely in agreement about this estimate.

Want to see how XP gets from today’s earnings to that future profile? The core of this narrative is compounded profit growth, disciplined margins and a re rated earnings multiple. The exact mix of revenue expansion, profitability and valuation re anchoring is where the story gets interesting.

Result: Fair Value of $23.97 (UNDERVALUED)

However, this XP narrative can be knocked off course if competitive fee pressure persists or if regulatory and tax changes dampen client activity and fee income.

Next Steps

If this XP story sounds promising, consider using the current momentum as an opportunity to review the numbers yourself and see what stands out, then take a closer look at the 5 key rewards.

Looking for more investment ideas beyond XP?

If XP has sharpened your appetite for opportunities, do not stop here. Widen your research with a few focused stock ideas that could refresh your watchlist.

• Target income potential by reviewing companies screened as steady payers through the 9 dividend fortresses.
• Hunt for mispriced opportunities by checking out the 49 high quality undervalued stocks that meet strict quality and fundamentals criteria.
• Prioritize resilience by examining the 81 resilient stocks with low risk scores and see which stocks align with a more defense first approach.

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.