Inter & Co (NasdaqGS:INTR) is in focus after announcing the U.S. debut of its wearable payment products, the Inter Ring and Inter Wristband, marking its entry into screen-free, battery-free contactless devices.

The U.S. wearable launch comes after a period where Inter & Co's share price has fallen 33.1% year to date and 32.7% over 90 days, even though the three year total shareholder return is 78.6%. This means recent weakness contrasts with a much stronger longer term picture.

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Bulls may view Inter & Co's wearables launch and its faster revenue and net income growth as an opportunity to reset expectations, while bears focus on the recent share price slide. Which side does the current valuation appear to favor?

Most Popular Narrative: 83% Undervalued

Inter & Co's most followed narrative points to a fair value of $33.30 per share versus the last close at $5.65, a wide gap that puts the focus firmly on long term execution rather than short term price moves.

At the beginning of 2023, Inter surprised those who did not follow the thesis in the market by disclosing its 60/30/30 Plan, which is a set of company guidelines for the year 2027. The company's goal is to reach 60 million customers, an efficiency index (expenses/revenues) of 30% and a return on equity (ROE) of 30%. In addition, a profit goal of R$ 5 billion and a goal of reaching R$ 100 billion in your credit portfolio were disclosed.

According to Souza123, that fair value rests on an ambitious 60/30/30 roadmap, with customer scale, efficiency and profitability targets all tightly linked to revenue growth, margins and balance sheet expansion.

Result: Fair Value of $33.30 (UNDERVALUED)

However, recent pressure on Inter & Co's share price and execution risk around its 60/30/30 profitability and credit growth targets could still challenge the case for undervaluation.

Next Steps

If the split views on Inter & Co leave you unsure, consider taking action while sentiment is mixed by weighing both sides for yourself and reviewing the 4 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Inter & Co?

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• Unearth lesser-known opportunities by scanning the screener containing 20 high quality undiscovered gems.

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.