SÃO PAULO - XP Inc. (NASDAQ:XP), a prominent financial services platform in Brazil, has initiated a share repurchase program, as announced by its board of directors today. The program authorizes the repurchase of up to R$1.0 billion (one billion Brazilian Reais) of its Class A common shares.
The repurchases may occur in the open market or through privately negotiated transactions until December 31, 2024, or until the program's completion, depending on market conditions.
The company plans to fund the repurchases from its existing cash reserves. The volume and timing of repurchases will be subject to market conditions, applicable legal requirements, and other factors. The program does not require the company to repurchase any particular number of shares and may be modified, suspended, or discontinued at any time.
XP has also given its management the authority to engage a broker to execute the share repurchases on its behalf. These transactions may be protected under the safe harbor provisions of Rule 10b-18 and/or Rule 10b5-1, established by the Securities and Exchange Commission.
XP Inc. is known for its technology-driven platform and commitment to providing low-fee financial products and services in Brazil. The company's mission includes educating new investors, democratizing financial services access, developing innovative financial products and technology, and delivering high-quality customer service.
This announcement is based on a press release statement from XP Inc.
InvestingPro Insights
XP Inc.'s proactive approach to shareholder value is evident in their recent share repurchase program, which aligns with the InvestingPro Tips highlighting management's aggressive buyback strategy. The company's stock has been identified as trading near its 52-week low, which may offer an attractive entry point for investors considering the company's strong fundamentals.
InvestingPro data underscores the financial health of XP Inc., with a market capitalization of $9.28 billion and a robust revenue growth of 17.91% over the last twelve months as of Q1 2024. The company's P/E ratio stands at 14.55, which adjusts to a more favorable 11.19 when considering the last twelve months as of Q1 2024. This is complemented by a PEG ratio of 0.57, suggesting that the stock could be undervalued given its earnings growth prospects.
Investors may also take note of the company's profitability, as XP Inc. has been profitable over the last twelve months. This is particularly relevant given the 1-month and 3-month price total returns of -12.54% and -25.14%, respectively, which may present a buying opportunity for long-term investors. The absence of dividend payments, as per InvestingPro Tips, indicates that the company is focused on reinvesting earnings to fuel further growth.
For those looking to delve deeper into XP Inc.'s financials and future outlook, InvestingPro offers additional tips and insights. The platform provides a comprehensive analysis, including an InvestingPro Fair Value estimate of $27.33, which could suggest potential upside from the previous close price of $17.99. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to numerous other InvestingPro Tips for XP Inc. at https://www.investing.com/pro/XP.
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