It's been a pretty great week for XP Inc. (NASDAQ:XP) shareholders, with its shares surging 13% to US$19.80 in the week since its latest second-quarter results. The result was positive overall - although revenues of R$4.2b were in line with what the analysts predicted, XP surprised by delivering a statutory profit of R$2.03 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Following the latest results, XP's nine analysts are now forecasting revenues of R$17.4b in 2024. This would be a decent 10% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 6.3% to R$8.48. Yet prior to the latest earnings, the analysts had been anticipated revenues of R$17.2b and earnings per share (EPS) of R$8.20 in 2024. So the consensus seems to have become somewhat more optimistic on XP's earnings potential following these results.

There's been no major changes to the consensus price target of US$24.41, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on XP, with the most bullish analyst valuing it at US$33.11 and the most bearish at US$19.06 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 22% growth on an annualised basis. That is in line with its 21% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.5% annually. So it's pretty clear that XP is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around XP's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$24.41, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for XP going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for XP that you need to take into consideration.

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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.