XP Plunges 7.9%: Can Earnings Triumph Over Macroeconomic Headwinds?

Summary
• XP Inc (NASDAQ:XP) trades at $16.115, down 7.9% from its previous close of $17.50
• Intraday range spans $15.71 to $16.66 amid $13.86M turnover
• Q2 2025 earnings highlight record BRL1.3B net income but 70% plunge in corporate inflows
• Analysts debate whether XP’s ecosystem diversification can offset Brazil’s high-interest rate environment

XP Inc’s stock has plunged nearly 8% in volatile intraday trading, reflecting a stark contrast between its record net income and macroeconomic challenges. Despite a 18% year-over-year earnings surge, corporate outflows and a 10% rise in SG&A expenses have triggered investor caution. With the stock testing its 200-day moving average of $15.74, the battle between earnings resilience and sector headwinds is intensifying.

Macroeconomic Pressures Overshadow Earnings Optimism
XP’s 7.9% intraday decline stems from a confluence of macroeconomic headwinds and operational challenges. While Q2 earnings reported a 24.4% ROE and 18% net income growth, corporate clients withdrew BRL6 billion, reflecting strained liquidity in Brazil’s high-interest rate environment. SG&A expenses rose 10% year-over-year, eroding efficiency gains. The 34.5% efficiency ratio, though improved by 161 bps, remains a drag as banks demand reciprocity in credit lines, hampering XP’s ability to retain corporate funds. These factors, coupled with a 70% drop in net inflows compared to last year, have triggered a risk-off sentiment despite the company’s capital-efficient model.

Diversified Financials Sector Mixed as Schwab Holds Steady
The Diversified Financials sector remains fragmented, with The Charles Schwab (SCHW) down 0.51% despite XP’s sharp decline. While XP’s ecosystem diversification into fee-based models and cross-sell verticals outperforms peers, its exposure to Brazil’s high-interest rate environment creates divergence. Schwab’s stable capital ratios and U.S.-centric operations insulate it from XP’s macroeconomic vulnerabilities, highlighting the sector’s uneven performance. However, XP’s 9.88x dynamic PE ratio suggests undervaluation relative to its earnings resilience, creating a strategic inflection point.

Options Playbook: Capitalizing on Volatility and Key Levels
• 200-day average: $15.735 (near support)
• RSI: 66.87 (neutral to overbought)
• MACD: -0.149 (bearish divergence)
• Bollinger Bands: $15.95–$17.83 (current price at lower band)

XP’s technicals suggest a short-term bearish bias with key support at $15.95 and resistance at $17.48. The stock’s 3.83% turnover rate and 3.83% turnover rate indicate moderate liquidity, favoring options strategies over direct equity exposure. Two options stand out for bearish positioning:

• XP20250829P16 (Put, $16 strike, 8/29 expiry):
- IV: 31.24% (moderate)
- Delta: -0.4439 (sensitive to price drops)
- Theta: -0.01037 (time decay manageable)
- Gamma: 0.4520 (high sensitivity to price swings)
- Turnover: 634 (liquid)
- Payoff at 5% downside ($15.31): $0.69 per contract
- This put offers a 43% premium capture if XP breaks below $16, leveraging its high gamma for rapid payoff acceleration.

• XP20250905P16.5 (Put, $16.5 strike, 9/5 expiry):
- IV: 22.15% (low)
- Delta: -0.7323 (deep in-the-money)
- Theta: -0.00049 (minimal time decay)
- Gamma: 0.5307 (high sensitivity)
- Turnover: 1,050 (high liquidity)
- Payoff at 5% downside ($15.31): $1.19 per contract
- This deep put provides downside protection with a 73% delta, ideal for hedging against a potential $15.73 support break.

Action Insight: Aggressive bears should prioritize XP20250829P16 for short-term volatility capture, while long-term hedgers may use XP20250905P16.5 to lock in downside protection. Watch for a breakdown below $15.95 to validate the bearish case.

Backtest XP Stock Performance
The backtest of XP's performance after a -8% intraday plunge shows mixed results. While the 3-day win rate is 48.64%, indicating a higher probability of a positive return in the short term, the 10-day win rate is slightly lower at 48.94%, and the 30-day win rate is 48.34%, suggesting that the longer-term performance is also moderately positive but with some volatility.

XP at Crossroads: Earnings Resilience vs. Macroeconomic Drag
XP’s sharp decline reflects a tug-of-war between its capital-efficient ecosystem and Brazil’s high-interest rate environment. While the stock’s 9.88x dynamic PE ratio and 24.4% ROE suggest undervaluation, corporate outflows and rising SG&A expenses pose near-term risks. Traders should monitor the $15.95 support level and the 200-day moving average for directional clues. With Schwab (SCHW) down 0.51%, sector divergence remains a key theme. Act now: Position in XP20250829P16 for a 43% premium capture if the $16 level breaks, or hold for a $15.73 support test to validate the bearish thesis.