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XP Inc.A (XP) Soars 30.9%: Is Further Upside Left in the Stock?

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XP Inc.A (XP - Free Report) shares soared 30.9% in the last trading session to close at $28.15. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 8.3% gain over the past four weeks.

XP retained its rally for the fifth straight day, driven by strength in its broad, open investment platform and extensive distribution network. The platform combines third-party products, proprietary offerings and capital-markets access, giving clients a wider range of solutions than traditional closed-bank models. Its advisor ecosystem, spanning IFAs, internal advisors and wealth managers, further strengthens client reach, while its established brand and financial-education focus support trust, engagement, loyalty and retention.

XP also benefits from a culture centered on execution, innovation and client focus. Its technology-driven, asset-light model is designed to scale efficiently, while the company’s integrated capabilities and services support a differentiated client experience. Management also highlights self-reinforcing network effects, as growth across clients, advisors, products and partners can strengthen the wider ecosystem. Recently, XP shares might have received an impetus after Brazil’s first-round presidential election outcome raised expectations of a shift toward tighter fiscal policy and greater spending discipline.

This company is expected to post quarterly earnings of $0.53 per share in its upcoming report, which represents a year-over-year change of +17.8%. Revenues are expected to be $962.49 million, up 12.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For XP Inc.A, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on XP going forward to see if this recent jump can turn into more strength down the road.

 

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

XP Inc.A is a member of the Zacks Financial - Miscellaneous Services industry. One other stock in the same industry, Qfin Holdings Inc. - Sponsored ADR (QFIN - Free Report) , finished the last trading session 1.5% higher at $6.56. QFIN has returned -28.7% over the past month.

For Qfin Holdings Inc. - Sponsored ADR, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.46. This represents a change of -69.7% from what the company reported a year ago. Qfin Holdings Inc. - Sponsored ADR currently has a Zacks Rank of #5 (Strong Sell).

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