XP Inc. announces $1 billion share buyback program

SÃO PAULO - XP Inc. (NASDAQ: XP), a prominent financial services platform in Brazil with a market capitalization of $9.96 billion, has declared the initiation of a new share repurchase scheme authorized by its board of directors. The program, which begins on May 21, 2025, allows for the buyback of Class A common shares amounting to R$1.0 billion, utilizing existing cash reserves. The repurchase plan is set to continue until December 31, 2026, or until the repurchase is complete, subject to market conditions. According to InvestingPro analysis, XP appears undervalued based on its Fair Value calculations, with the stock showing strong momentum, having gained over 57% year-to-date.

The company’s management has been given the green light to engage a broker to execute the share repurchases on the open market, potentially under the protection of Rule 10b-18 and/or Rule 10b5-1 established by the Securities and Exchange Commission. These rules provide a safe harbor for companies engaging in stock repurchase programs. InvestingPro data reveals that management has been consistently aggressive with share buybacks, while maintaining a healthy financial position with a "GOOD" overall health score.

The extent and timing of the repurchases under this program will depend on various factors, including market price, general business and market conditions, and other investment opportunities. XP Inc. is not committed to repurchasing a specific number of shares and may adjust, extend, modify, or discontinue the program at any time.

XP Inc. is recognized for its technology-driven platform that offers low-fee financial products and services. Trading at a P/E ratio of 12.6 and demonstrating strong profitability with a 69% gross margin, the company’s mission includes educating new investors, democratizing financial service access, innovating financial products and technology, and delivering superior customer service in Brazil. XP Inc. caters to a diverse clientele, offering financial advisory services and an open product platform featuring a wide array of investment options. For detailed insights into XP’s financial health and growth prospects, investors can access comprehensive analysis through InvestingPro’s exclusive Research Report, part of its coverage of over 1,400 US-listed companies.

The press release includes forward-looking statements that are based on current expectations and projections about future events. These statements are inherently uncertain, and actual results may differ materially due to various risk factors and uncertainties, including competition, regulatory changes, and external market forces.

This news article is based on a press release statement from XP Inc. and contains no endorsement of the company’s claims.

In other recent news, XP Inc. has completed the cancellation of over 12 million Class A treasury shares, reducing its total share count by approximately 2.2%. This strategic move is part of the company’s efforts to adjust its capital structure. Morgan Stanley has upgraded XP Inc.’s stock rating from Equalweight to Overweight and increased the price target to $24, citing potential benefits from a declining interest rate environment. The firm anticipates that XP Inc. will experience growth in trading activity and assets under management.

Itau BBA has also initiated coverage on XP Inc. with an Outperform rating and a $20 price target, highlighting strategic shifts that focus on client relationships and monetization. Meanwhile, XP Inc. has publicly refuted allegations made by a short seller, asserting that claims questioning its financial health are without merit. The company emphasized its commitment to transparency and regulatory compliance. These developments come amid accusations from Grizzly Research, which alleged that XP Inc. is operating a Ponzi scheme through its fund operations, claims that the company has yet to address publicly.

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