XP (XP) has drawn fresh attention after reporting its 2025 audited results, combining higher earnings and strong cash flow with a cash dividend, a new share repurchase plan, and sizable disclosed institutional stakes.

Despite the 2.9% one day share price decline and 5.5% 7 day share price return, XP’s 14.3% year to date share price return and mixed 1 year and multi year total shareholder returns suggest momentum has cooled after earlier strength.

If XP’s latest results have you thinking about where else capital could work hard, this is a good moment to widen your search with the 17 top founder-led companies

With XP trading at $18.50 and analysts on average targeting around $25.19, plus an internal estimate suggesting a similar discount, the question is clear: is the stock on sale or is the market already pricing in future growth?

Most Popular Narrative: 23.3% Undervalued

With XP last closing at $18.50 against a narrative fair value of $24.11, the widely followed storyline frames the stock as trading at a clear discount while hinging that gap on specific growth and margin expectations.

The consensus analyst price target for XP has shifted higher, with some moving to $26 from $22 as analysts factor in management’s reiterated 2026 gross revenue guidance, expectations for about 12% revenue growth in 2026, and stronger profit margin assumptions alongside a slightly lower forward P/E multiple.

Curious what is sitting underneath that higher fair value. The narrative leans on earnings expansion, revenue compounding and a future profit multiple that is not extreme by sector standards.

Result: Fair Value of $24.11 (UNDERVALUED)

However, the story can shift quickly if rising competition squeezes XP’s fees or if regulatory changes in Brazil reduce trading activity and fee income.

Next Steps

With sentiment clearly split in this article, it makes sense to move quickly, review the data directly, and evaluate XP against its peers using the 5 key rewards

Looking for more investment ideas?

If XP has sharpened your focus, do not stop here. Broadening your watchlist now can help you spot opportunities before they become crowded trades.

• Target value by scanning companies that combine quality fundamentals with attractive prices through the 48 high quality undervalued stocks
• Protect your downside by focusing on companies with sturdier finances using the solid balance sheet and fundamentals stocks screener (45 results)
• Get ahead of the crowd by tracking lesser known opportunities with strong metrics via the screener containing 25 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.