XP (NasdaqGS:XP) is drawing fresh attention after XP Investimentos reported that over 99% of corporate spend now flows through an integrated, AI supported procurement platform. The shift is aimed at tighter cost control and supplier risk management.

XP's recent AI procurement update comes as the stock trades at US$16.68, with a 30 day share price return of 6.38%, a 90 day share price decline of 20.95%, and a 1 year total shareholder return decline of 5.82%. This indicates pressure on longer term holders despite modest year to date gains.

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After XP's recent AI driven procurement shift and share price rebound, the key issue now is whether most of the repricing has already happened or if the current valuation still leaves meaningful upside ahead for new capital.

Most Popular Narrative: 30% Undervalued

XP's most followed valuation narrative points to a fair value of $23.97 per share, which sits well above the current $16.68 trading price, putting the recent AI procurement update in the context of a stock that models still see as materially discounted.

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.

Curious what powers that fair value gap for XP? The narrative leans heavily on steady revenue compounding, firm margins and a future earnings multiple that still sits below industry levels.

Result: Fair Value of $23.97 (UNDERVALUED)

However, XP's thesis could be tested if fee compression accelerates or if rising marketing and technology spend outpaces revenue, which would put pressure on margins and valuation assumptions.

Next Steps

If this XP story so far sounds constructive, it is worth moving quickly to review the underlying numbers and pressure test the optimism yourself. To understand what the market is currently rewarding, take a closer look at the 5 key rewards.

Looking for more investment ideas beyond XP?

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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.