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Waste Management, Inc. (WM) Presents at 46th Annual William Blair Growth Stock Conference Transcript

Investors interested in Waste Removal Services stocks are likely familiar with Veolia Environnement SA (VEOEY) and Waste Management (WM). But which of these two stocks offers value investors a better bang for their buck right now?

It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.

The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores? The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.

The Style Scores are broken down into four categories:

Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.

Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.

Momentum ScoreMomentum traders and investors live by the saying "the trend is your friend." This investing style is all about taking advantage of upward or downward trends in a stock's price or earnings outlook. Employing factors like one-week price change and the monthly percentage change in earnings estimates, the Momentum Style Score can indicate favorable times to build a position in high-momentum stocks.

VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.

How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.

It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

This totals more than 800 top-rated stocks, and it can be overwhelming to try and pick the best stocks for you and your portfolio.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Waste Management (WM - Free Report) Headquartered in Houston, Texas, Waste Management Inc. is a leading provider of comprehensive waste management services in North America. Formerly known as USA Waste Services, Inc., the company changed its name to Waste Management, Inc. in 1998.

WM is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.

Additionally, the company could be a top pick for growth investors. WM has a Growth Style Score of B, forecasting year-over-year earnings growth of 8.7% for the current fiscal year.

Six analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.01 to $8.15 per share. WM also boasts an average earnings surprise of +0.6%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, WM should be on investors' short list.

Westaim (OTCMKTS:WEDXF - Get Free Report) and Westlake Chemical Partners (NYSE: WLKP - Get Free Report) are both small-cap basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability. Valuation and Earnings This table compares

Posted by Defense World Staff on Apr 17th, 2026

Givaudan (OTCMKTS:GVDNY – Get Free Report) and Westlake Chemical Partners (NYSE:WLKP – Get Free Report) are both basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, analyst recommendations and risk.

Risk & Volatility Givaudan has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500. Comparatively, Westlake Chemical Partners has a beta of 0.57, suggesting that its stock price is 43% less volatile than the S&P 500.

Analyst Ratings This is a summary of current recommendations and price targets for Givaudan and Westlake Chemical Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Givaudan 2 3 2 0 2.00 Westlake Chemical Partners 0 2 0 0 2.00 Dividends Givaudan pays an annual dividend of $1.11 per share and has a dividend yield of 1.5%. Westlake Chemical Partners pays an annual dividend of $1.89 per share and has a dividend yield of 8.5%. Westlake Chemical Partners pays out 137.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional and Insider Ownership 0.0% of Givaudan shares are held by institutional investors. Comparatively, 78.3% of Westlake Chemical Partners shares are held by institutional investors. 1.1% of Westlake Chemical Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation This table compares Givaudan and Westlake Chemical Partners”s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Givaudan $9.02 billion 3.75 $1.29 billion N/A N/A Westlake Chemical Partners $1.17 billion 0.67 $48.70 million $1.38 16.16 Givaudan has higher revenue and earnings than Westlake Chemical Partners.

Profitability This table compares Givaudan and Westlake Chemical Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets Givaudan N/A N/A N/A Westlake Chemical Partners 4.17% 5.99% 3.74% About Givaudan (Get Free Report)

Givaudan SA manufactures, supplies, and sells fragrance, beauty, taste, and wellbeing products to the consumer goods industry. The company operates through divisions, Fragrance & Beauty, and Taste & Wellbeing. The Fragrance & Beauty division offers fine fragrances; consumer products, such as personal, home, fabric, and oral care; fragrance ingredients; and active beauty products. The Taste & Wellbeing division provides beverages, such as fizzy drinks, bottled waters, ready-to-drink juices, alcoholic beverages, and others; dairy and cheese products, including dairy drinks, yoghurt, ice cream, chilled desserts, cream cheese, and spreads; snacks; givaudan flavour ingredients; savory, and supplements and nutraceutical products; and biscuits, crackers, and cereals, as well as confectionery products, such as chewing gums, chocolates, and sweets. It operates in Switzerland, Europe, Africa, the Middle East, North America, Latin America, and the Asia Pacific. Givaudan SA was founded in 1796 and is headquartered in Vernier, Switzerland.

About Westlake Chemical Partners (Get Free Report)

Westlake Chemical Partners LP acquires, develops, and operates ethylene production facilities and related assets in the United States. The company’s ethylene production facilities primarily convert ethane into ethylene. It also sells ethylene co-products, such as propylene, crude butadiene, pyrolysis gasoline, and hydrogen directly to third parties on either a spot or contract basis. Westlake Chemical Partners GP LLC serves as the general partner of the company. Westlake Chemical Partners LP was founded in 1991 and is headquartered in Houston, Texas.

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$0.4714 per unit distribution declared payable on June 1, 2026 HOUSTON--(BUSINESS WIRE)--The Board of Directors of Westlake Chemical Partners GP LLC, the general partner of Westlake Chemical Partners LP (the "Partnership") (NYSE:WLKP), has declared a distribution of $0.4714 per unit. This is the 47th quarterly distribution announced by the Partnership since its initial public offering. The distribution will be payable on June 1, 2026, to unit holders of record on May 14, 2026.

Westlake Chemical Partners LP (the "Partnership") (NYSE:WLKP), has declared a distribution of $0.4714 per unit that will be payable on June 1, 2026.

Share This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of the Partnership’s distributions to non-U.S. investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, the Partnership’s distributions to non-U.S. investors are subject to federal income tax withholding at the highest applicable effective tax rate.

About Westlake Chemical Partners LP

Westlake Chemical Partners is a limited partnership formed by Westlake Corporation to operate, acquire and develop ethylene production facilities and other qualified assets. Headquartered in Houston, the Partnership owns a 22.8% interest in Westlake Chemical OpCo LP. Westlake Chemical OpCo LP’s assets include three facilities in Calvert City, Kentucky, and Lake Charles, Louisiana which process ethane and propane into ethylene, and an ethylene pipeline. For more information about Westlake Chemical Partners LP, please visit http://www.wlkpartners.com.

More News From Westlake Chemical Partners

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Westlake Chemical Partners LP Common Units (WLKP) Q1 2026 Earnings Call Transcript

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company to watch right now is XP (XP - Free Report) . XP is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A.

We should also highlight that XP has a P/B ratio of 2.7. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.01. XP's P/B has been as high as 3.08 and as low as 1.60, with a median of 2.34, over the past year.

Finally, we should also recognize that XP has a P/CF ratio of 11.68. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. XP's current P/CF looks attractive when compared to its industry's average P/CF of 17.29. Within the past 12 months, XP's P/CF has been as high as 12.54 and as low as 6.71, with a median of 9.85.

Value investors will likely look at more than just these metrics, but the above data helps show that XP is likely undervalued currently. And when considering the strength of its earnings outlook, XP sticks out as one of the market's strongest value stocks.

XP Inc.A (XP - Free Report) closed the last trading session at $19.16, gaining 3% over the past four weeks, but there could be plenty of upside left in the stock if short-term price targets set by Wall Street analysts are any guide. The mean price target of $25.51 indicates a 33.1% upside potential.

The mean estimate comprises 10 short-term price targets with a standard deviation of $2.46. While the lowest estimate of $22.00 indicates a 14.8% increase from the current price level, the most optimistic analyst expects the stock to surge 56.6% to reach $30.00. It's very important to note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.

While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.

However, an impressive consensus price target is not the only factor that indicates a potential upside in XP. This view is strengthened by the agreement among analysts that the company will report better earnings than what they estimated earlier. Though a positive trend in earnings estimate revisions doesn't give any idea as to how much the stock could surge, it has proven effective in predicting an upside.

Price, Consensus and EPS Surprise

Here's What You Should Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.

While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?

They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.

However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.

That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.

Why XP Could Witness a Solid UpsideThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

The Zacks Consensus Estimate for the current year has increased 0.7% over the past month, as one estimate has gone higher compared to no negative revision.

Moreover, XP currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .

Therefore, while the consensus price target may not be a reliable indicator of how much XP could gain, the direction of price movement it implies does appear to be a good guide.

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is XP (XP - Free Report) . XP is currently sporting a Zacks Rank #2 (Buy) and an A for Value.

Another notable valuation metric for XP is its P/B ratio of 2.7. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 3.12. Over the past 12 months, XP's P/B has been as high as 3.08 and as low as 1.60, with a median of 2.34.

Finally, investors should note that XP has a P/CF ratio of 11.68. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 17.69. Over the past 52 weeks, XP's P/CF has been as high as 12.54 and as low as 6.71, with a median of 9.85.

These figures are just a handful of the metrics value investors tend to look at, but they help show that XP is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, XP feels like a great value stock at the moment.

XP Inc.A (XP - Free Report) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.

The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.

Individual investors often find it hard to make decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy because of the power of a changing earnings picture in determining near-term stock price movements.

As such, the Zacks rating upgrade for XP Inc.A is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price.

Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.

Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for XP Inc.A imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.

Harnessing the Power of Earnings Estimate RevisionsAs empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .

Earnings Estimate Revisions for XP Inc.AFor the fiscal year ending December 2026, this company is expected to earn $2.06 per share, which is unchanged compared with the year-ago reported number.

Analysts have been steadily raising their estimates for XP Inc.A. Over the past three months, the Zacks Consensus Estimate for the company has increased 6.7%.

Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of XP Inc.A to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

SÃO PAULO--(BUSINESS WIRE)--XP Inc. (NASDAQ: XP) (“XP” or the “Company”), a leading tech-enabled platform and a trusted pioneer in providing low-fee financial products and services in Brazil, reported today its financial results for the first quarter of 2026.

Summary

Operating Metrics (unaudited)

1Q26

1Q25

YoY

4Q25

QoQ

Total Client Assets (in R$ bn)

1,529

1,328

15%

1,491

3%

Total Net Inflow (in R$ bn)

14

24

-39%

32

-55%

Annualized Retail Take Rate

1.18%

1.25%

-7 bps

1.25%

-7 bps

Active Clients (in '000s)

4,790

4,693

2%

4,762

1%

Headcount (EoP)

8,280

7,356

13%

8,093

2%

Total Advisors (in '000s)

18.3

18.1

1%

18.0

2%

Retail DATs (in mn)

2.7

2.2

23%

2.2

21%

Retirement Plans Client Assets (in R$ bn)

98

83

17%

95

3%

Cards TPV (in R$ bn)

13.3

12.1

10%

14.6

-9%

Expanded Loan Portfolio (in R$ bn)

74.3

64.2

16%

78.0

-5%

Gross Written Premiums (in R$ mn)

405

348

16%

502

-19%

Financial Metrics (in R$ mn)1

1Q26

1Q25

YoY

4Q25

QoQ

Gross revenue

4,919

4,557

8%

5,279

-7%

Retail

3,773

3,441

10%

3,862

-2%

Wholesale Bank

1,146

906

26%

1,241

-8%

Other

-

210

-100%

175

-100%

Net Revenue

4,733

4,392

8%

5,017

-6%

Gross Profit

3,179

2,963

7%

3,481

-9%

Gross Margin

67.2%

67.5%

-29 bps

69.4%

-222 bps

EBT

1,418

1,314

8%

1,640

-14%

EBT Margin

30.0%

29.9%

5 bps

32.7%

-273 bps

Adjusted Net Income

1,318

1,236

7%

1,331

-1%

Adjusted Net Margin

27.8%

28.1%

-30 bps

26.5%

132 bps

Adjusted Diluted EPS (in R$)

2.49

2.29

9%

2.56

-3%

Adjusted ROAE2

21.7%

24.1%

-235 bps

22.8%

-108 bps

Adjusted ROTE3

26.2%

30.2%

-391 bps

27.7%

-145 bps

Capital Ratio

20.7%

19.0%

169 bps

20.4%

27 bps

  1 – Please refer to the Non-GAAP Financial Reconciliation.

2 – Annualized Return on Average Equity.

3 – Annualized Return on Average Tangible Equity. Tangible Equity excludes Intangibles and Goodwill.

Operating KPIs

1. INVESTMENTS

Client Assets and Net Inflow (in R$ billion)

Client Assets totaled R$1.5 trillion in 1Q26, up 15%YoY and 3% QoQ. Year-over-year growth was driven by R$85 billion net inflow and R$116 billion of market appreciation.

In 1Q26, Net Inflow was R$14 billion, and Retail Net Inflow was R$19 billion, in line with both year-on-year and quarter-on-quarter levels.

Active Clients (in ‘000s)

Active clients grew 2% YoY and 1% QoQ, totaling 4.8 million in 1Q26.

Total Advisors (in ‘000s)

Total Advisors connected to XP, including (1) IFAs, (2) XP employees who offer advisory services, (3) Registered Investment Advisors, consultants and wealth managers, among others. As of 1Q26, we had 18.3 thousand Total Advisors, an increase of approximately 1% YoY.

Retail Daily Average Trades (in million)

Retail DATs totaled 2.7 million in 1Q26, up 23% YoY and 21% QoQ.

NPS

Our NPS, a widely known survey methodology used to measure customer satisfaction, was 61 in 1Q26. The NPS calculation as of a given date reflects the average scores in the prior six months.

2. RETIREMENT PLANS

Retirement Plans Client Assets (in R$ billion)

As per public data published by Susep, XPV&P’s individual’s market share (PGBL and VGBL) was stable at 5%. Total Client Assets were R$98 billion in 1Q26, up 17% YoY. Assets from XPV&P, our proprietary insurer, grew 39% YoY, reaching R$95 billion.

3. CARDS

Cards TPV (in R$ billion)

In 1Q26, Total TPV was R$13.3 billion, a 10% growth YoY and 9% decrease QoQ, given the year-end seasonality in 4Q25.

Active Cards (in ‘000s)

Total Active Cards were 1.5 million in 1Q26, representing a 9% growth YoY and 1% up QoQ, being close to 1.0 million Credit Cards and 0.5 million Active Debit Cards.

4. CREDIT

Expanded Loan Portfolio (in R$ billion)

Expanded Loan Portfolio reached R$74 billion as of 1Q26, expanding 16% YoY and 5% lower QoQ.

5. INSURANCE

Gross Written Premiums (in R$ million)

Gross written premiums (GWP) refer to the total amount of premium income that XPs has written or sold during a particular reporting period before deductions for provisions, reinsurance and other expenses. This figure represents the total premiums that customers have agreed to pay for life insurance policies issued by the company or sold by the company and issued by third-party insurers, including both new policies and renewals. It is a crucial metric for assessing the total business volume of an insurance company or insurance broker within that period.

In 1Q26, Gross Written Premiums grew 16% YoY and decreased 19% QoQ.

Discussion of Financial Results

Total Gross Revenue1

Gross revenue reached R$4.9 billion in 1Q26, reflecting an increase of 8% year-over-year and 7% lower quarter-over-quarter.

The year-over-year growth was driven by equities, retail new verticals, and other retail, with new ventures and floating expanding at a rapid pace. The Wholesale bank division also delivered year-over-year growth.

Retail Revenue

(in R$ mn)

1Q26

1Q25

YoY

4Q25

QoQ

Retail Revenue

3.773

3.441

10%

3.862

-2%

Equities

1.167

959

22%

1.035

13%

Fixed Income

756

1.015

-25%

934

-19%

Funds Platform

392

322

22%

412

-5%

Retirement Plans

118

107

11%

131

-9%

Cards

356

319

12%

398

-11%

Credit

90

82

10%

83

9%

Insurance

59

53

11%

123

-52%

Other Retail

834

584

43%

747

12%

Annualized Retail Take Rate

1,18%

1,25%

-7 bps

1,25%

-7 bps

Retail revenue reached R$3,773 million in 1Q26, representing a 2% decrease quarter-over-quarter and a 10% increase year-over-year.

Retail revenue growth in 1Q26 was supported by increase in equity volumes, driven by higher ADTV in equities and futures. Consequently, Equities revenues increased 13% quarter-over-quarter and 22% when compared to the same period of last year, reaching almost R$1.2 billion. Retail Revenue performance also benefited from strong contributions from float and new verticals, which are reported in the Other Retail line and gained representativeness during the quarter.

Take Rate

Annualized Retail Take Rate was 1.18% in 1Q26, 7bps lower QoQ and YoY.

Wholesale Banking

We now include our Institutional business in the Wholesale segment. Taken together, Corporate, Issuer Services and Institutional grew 26% year-over-year, with revenues totaling R$1,146 million in 1Q26. The YoY performance was driven by a robust Corporate activity, with revenues reaching R$498 million, a 78% increase YoY. Due to high volatility, we were able to serve our clients with more derivatives, foreign exchange and trading solutions, boosting this segment’s revenues.

Other Revenue

Accompanying the final phase of our restructuring, the Other revenue line has become less relevant over the years and ceased to exist, being incorporated in the net interest margin across our business lines.

Costs of Goods Sold and Gross Margin

Gross Margin was 67.2% in 1Q26 versus 69.4% in 4Q25 and 67.5% in 1Q25.

SG&A Expenses

(in R$ mn)

1Q26

1Q25

YoY

4Q25

QoQ

Total SG&A

(1,610)

(1,416)

14%

(1,722)

-6%

People

(1,096)

(970)

13%

(1,140)

-4%

Salary and Taxes

(480)

(439)

9%

(450)

7%

Bonuses

(505)

(383)

32%

(565)

-11%

Share Based Compensation

(111)

(148)

-25%

(124)

-11%

Non-people

(514)

(447)

15%

(582)

-12%

LTM Compensation Ratio4

-23.2%

-22.8%

-39 bps

-22.9%

-26 bps

LTM Efficiency Ratio5

-34.6%

-33.6%

-102 bps

-34.2%

-41 bps

Headcount (EoP)

8,280

7,356

13%

8,093

2%

SG&A expenses totaled R$1.6 billion in 1Q26, 6% lower QoQ, and 14% higher YoY.

Our last twelve months (LTM) compensation ratio4 in 1Q26 was 23.2%. Also, our LTM efficiency ratio5 reached 34.6% in 1Q26.

Earnings Before Taxes

EBT was R$1,418 million in 1Q26, down 14% QoQ and up 8% YoY. The EBT margin was 30.0%, slightly up versus the prior year and lower quarter-over-quarter.

Adjusted Net Income and Adjusted EPS1

In 1Q26, Adjusted Net Income reached R$1.3 billion, roughly stable QoQ and increasing 7% on a year-over-year comparison. Adjusted Basic EPS was R$2.53, 2% lower QoQ growth and 9% higher YoY. Adjusted Diluted EPS was R$2.49 for the quarter, 3% lower QoQ and 9% higher YoY.

Adjusted ROTE1,6 and Adjusted ROAE1,7

In 1Q26 our Adjusted Return on Equity (ROAE) reached 21.7%, while return on tangible equity (ROTE) was 26.2%. Both metrics were down this quarter as we maintained a higher BIS ratio.

Capital Management8

In 1Q26 our BIS Ratio was 20.7%, 27 bps higher QoQ and 169 bps higher YoY, while our total RWA was R$122.2 billion, with a 3% increase QoQ and 20% increase YoY. Our CET1 ratio remains at a comfortable level of 17.5%. During 1Q26, we executed share repurchases of approximately R$200 million. In addition, we are announcing a new buyback program of R$1 billion and new dividends in the amount of R$500 million, to be paid on June 18th, 2026. We are comfortable with getting our BIS ratio to our target range of 16% to 19% toward the end of the year, through capital distributions, while still maintaining a comfortable capital buffer.

  6 – Annualized Return on Tangible Common Equity, calculated as Annualized Net Income over Tangible Common Equity, which excludes Intangibles and Goodwill, net of deferred taxes.

7 – Annualized Return on Average Equity.

8 – Managerial BIS Ratio is calculated using the same methodology as the BIS Ratio for our Prudential Conglomerate. However, it is based on the total assets and equity of the entire group.

Other Information

Webcast and Conference Call Information

The Company will host a webcast to discuss its fourth quarter financial results on Monday, May 18th, 2026, at 5:00 pm ET (6:00 pm BRT). To participate in the earnings webcast please subscribe at 1Q26 Earnings Web Meeting. The replay will be available on XP’s investor relations website at https://investors.xpinc.com/.

Important Disclosure

In reviewing the information contained in this release, you are agreeing to abide by the terms of this disclaimer. This information is being made available to each recipient solely for its information and is subject to amendment. This release is prepared by XP Inc. (the “Company,” “we” or “our”), is solely for informational purposes. This release does not constitute a prospectus and does not constitute an offer to sell or the solicitation of an offer to buy any securities. In addition, this document and any materials distributed in connection with this release are not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.

This release was prepared by the Company. Neither the Company nor any of its affiliates, officers, employees or agents, make any representation or warranty, express or implied, in relation to the fairness, reasonableness, adequacy, accuracy or completeness of the information, statements or opinions, whichever their source, contained in this release or any oral information provided in connection herewith, or any data it generates and accept no responsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) in relation to any of such information. The information and opinions contained in this release are provided as at the date of this release, are subject to change without notice and do not purport to contain all information that may be required to evaluate the Company. The information in this release is in draft form and has not been independently verified. The Company and its affiliates, officers, employees and agents expressly disclaim any and all liability which may be based on this release and any errors therein or omissions therefrom. Neither the Company nor any of its affiliates, officers, employees or agents makes any representation or warranty, express or implied, as to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any.

The information contained in this release does not purport to be comprehensive and has not been subject to any independent audit or review. Certain of the financial information as of and for the periods ended of December 31, 2021 and December 31, 2020, 2019, 2018 and 2017 has been derived from audited financial statements and all other financial information has been derived from unaudited interim financial statements. A significant portion of the information contained in this release is based on estimates or expectations of the Company, and there can be no assurance that these estimates or expectations are or will prove to be accurate. The Company’s internal estimates have not been verified by an external expert, and the Company cannot guarantee that a third party using different methods to assemble, analyze or compute market information and data would obtain or generate the same results.

Statements in the release, including those regarding the possible or assumed future or other performance of the Company or its industry or other trend projections, constitute forward-looking statements. These statements are generally identified by the use of words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others. By their nature, forward-looking statements are necessarily subject to a high degree of uncertainty and involve known and unknown risks, uncertainties, assumptions and other factors because they relate to events and depend on circumstances that will occur in the future whether or not outside the control of the Company. Such factors may cause actual results, performance or developments to differ materially from those expressed or implied by such forward-looking statements and there can be no assurance that such forward-looking statements will prove to be correct. These risks and uncertainties include factors relating to: (1) general economic, financial, political, demographic and business conditions in Brazil, as well as any other countries we may serve in the future and their impact on our business; (2) fluctuations in interest, inflation and exchange rates in Brazil and any other countries we may serve in the future; (3) competition in the financial services industry; (4) our ability to implement our business strategy; (5) our ability to adapt to the rapid pace of technological changes in the financial services industry; (6) the reliability, performance, functionality and quality of our products and services and the investment performance of investment funds managed by third parties or by our asset managers; (7) the availability of government authorizations on terms and conditions and within periods acceptable to us; (8) our ability to continue attracting and retaining new appropriately-skilled employees; (9) our capitalization and level of indebtedness; (10) the interests of our controlling shareholders; (11) changes in government regulations applicable to the financial services industry in Brazil and elsewhere; (12) our ability to compete and conduct our business in the future; (13) the success of operating initiatives, including advertising and promotional efforts and new product, service and concept development by us and our competitors; (14) changes in consumer demands regarding financial products, customer experience related to investments and technological advances, and our ability to innovate to respond to such changes; (15) changes in labor, distribution and other operating costs; (16) our compliance with, and changes to, government laws, regulations and tax matters that currently apply to us; (17) other factors that may affect our financial condition, liquidity and results of operations. Accordingly, you should not place undue reliance on forward-looking statements. The forward-looking statements included herein speak only as at the date of this release and the Company does not undertake any obligation to update these forward-looking statements. Past performance does not guarantee or predict future performance. Moreover, the Company and its affiliates, officers, employees and agents do not undertake any obligation to review, update or confirm expectations or estimates or to release any revisions to any forward-looking statements to reflect events that occur or circumstances that arise in relation to the content of the release. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented and we do not intend to update any of these forward-looking statements.

Market data and industry information used throughout this release are based on management’s knowledge of the industry and the good faith estimates of management. The Company also relied, to the extent available, upon management’s review of industry surveys and publications and other publicly available information prepared by a number of third-party sources. All of the market data and industry information used in this release involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. Although the Company believes that these sources are reliable, there can be no assurance as to the accuracy or completeness of this information, and the Company has not independently verified this information.

The contents hereof should not be construed as investment, legal, tax or other advice and you should consult your own advisers as to legal, business, tax and other related matters concerning an investment in the Company. The Company is not acting on your behalf and does not regard you as a customer or a client. It will not be responsible to you for providing protections afforded to clients or for advising you on the relevant transaction.

This release includes Adjustments to Reported Net Income, which is non-GAAP financial information. We believe that such information is meaningful and useful in understanding the activities and business metrics of the Company’s operations. We also believe that these non-GAAP financial measures reflect an additional way of viewing aspects of the Company’s business that, when viewed with our International Financial Reporting Standards (“IFRS”) results, as issued by the International Accounting Standards Board, provide a more complete understanding of factors and trends affecting the Company’s business. Further, investors regularly rely on non-GAAP financial measures to assess operating performance and such measures may highlight trends in the Company’s business that may not otherwise be apparent when relying on financial measures calculated in accordance with IFRS. We also believe that certain non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of public companies in the Company’s industry, many of which present these measures when reporting their results. The non-GAAP financial information is presented for informational purposes and to enhance understanding of the IFRS financial statements. The non-GAAP measures should be considered in addition to results prepared in accordance with IFRS, but not as a substitute for, or superior to, IFRS results. As other companies may determine or calculate this non-GAAP financial information differently, the usefulness of these measures for comparative purposes is limited. A reconciliation of such non-GAAP financial measures to the nearest GAAP measure is included in this release.

For purposes of this release:

“Active Clients” means the total number of retail clients served through our XP Investimentos, Rico, Clear, XP Investments and XP Private (Europe) brands, with Client Assets above R$100.00 or that have transacted at least once in the last thirty days. For purposes of calculating this metric, if a client holds an account in more than one of the aforementioned entities, such client will be counted as one “active client” for each such account. For example, if a client holds an account in each of XP Investimentos and Rico, such client will count as two “active clients” for purposes of this metric.

“Client Assets” means the market value of all client assets invested through XP’s platform and that is related to reported Retail Revenue, including equities, fixed income securities, mutual funds (including those managed by XP Gestão de Recursos Ltda., XP Advisory Gestão de Recursos Ltda. and XP Vista Asset Management Ltda., as well as by third-party asset managers), pension funds (including those from XP Vida e Previdência S.A., as well as by third-party insurance companies), exchange traded funds, COEs (Structured Notes), REITs, and uninvested cash balances (Float Balances), among others. Although Client Assets includes custody from Corporate Clients that generate Retail Revenue, it does not include custody from institutional clients (asset managers, pension funds and insurance companies).

Rounding

We have made rounding adjustments to some of the figures included in this release. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

Unaudited Managerial Income Statement (in R$ mn)

Managerial Income Statement

1Q26

1Q25

YoY

4Q25

QoQ

Total Gross Revenue

4.919

4.557

8%

5.279

-7%

Retail

3.773

3.441

10%

3.862

-2%

Equities

1.167

959

22%

1.035

13%

Fixed Income

756

1.015

-25%

934

-19%

Funds Platform

392

322

22%

412

-5%

Retirement Plans

118

107

11%

131

-9%

Cards

356

319

12%

398

-11%

Credit

90

82

10%

83

9%

Insurance

59

53

11%

123

-52%

Other Retail

834

584

43%

747

12%

Wholesale

1.146

906

26%

1.241

-8%

Issuer Services

269

282

-5%

404

-33%

Corporate

498

280

78%

491

1%

Institutional

379

344

10%

346

9%

Other

-

210

-100%

175

-100%

Net Revenue

4.733

4.392

8%

5.017

-6%

COGS

(1.554)

(1.429)

9%

(1.536)

1%

Gross Profit

3.179

2.963

7%

3.481

-9%

Gross Margin

67,2%

67,5%

-29 bps

69,4%

-222 bps

SG&A

(1.609)

(1.408)

14%

(1.703)

-6%

People

(1.096)

(970)

13%

(1.140)

-4%

Non-People

(512)

(438)

17%

(563)

-9%

D&A

(68)

(72)

-5%

(63)

9%

Interest expense on debt

(103)

(177)

-42%

(130)

-21%

Share of profit in joint ventures and associates

19

7

150%

55

-66%

EBT

1.418

1.314

8%

1.640

-14%

EBT Margin

30,0%

29,9%

5 bps

32,7%

-273 bps

Tax Expense

(100)

(77)

29%

(309)

-68%

Tax expense (Tax Witholding in Funds)

(30)

(177)

-83%

(45)

-33%

Effective Tax Rate

-9.0%

-17.1%

0 bps

-21.0%

-1 bps

Adjusted Net Income

1.318

1.236

7%

1.331

-1%

Adjusted Net Margin

27,8%

28,1%

-30 bps

26,5%

132 bps

Accounting Income Statement (in R$ mn)

Accounting Income Statement

1Q26

1Q25

YoY

4Q25

QoQ

Net revenue from services rendered

1,932

1,650

17%

2,432

-21%

Brokerage commission

582

473

23%

522

12%

Securities placement

477

477

0%

883

-46%

Management fees

532

413

29%

547

-3%

Insurance brokerage fee

58

58

1%

58

-1%

Commission Fees

268

241

11%

359

-25%

Other services

202

152

32%

326

-38%

Sales Tax and contributions on Services

(186)

(165)

13%

(262)

-29%

Net income from financial instruments at amortized cost and at fair value through other comprehensive income

(1,170)

(902)

30%

(2,434)

-52%

Net income from financial instruments at fair value through profit or loss

3,912

3.596

9%

4,940

-21%

Total revenue and income

4,674

4,345

8%

4,938

-5%

Operating costs

(1,442)

(1,283)

12%

(1,470)

-2%

Selling expenses

(70)

(57)

24%

(80)

-12%

Administrative expenses

(1,641)

(1,448)

13%

(1,712)

-4%

Other operating revenues (expenses), net

18

23

-18%

3

464%

Expected credit losses

(112)

(146)

-24%

(66)

68%

Interest expense on debt

(103)

(177)

-42%

(130)

-21%

Share of profit or (loss) in joint ventures and associates

19

7

150%

55

-66%

Income before income tax

1,343

1,263

6%

1,537

-13%

Income tax expense

(26)

(27)

-3%

(256)

-90%

Net income for the period

1,318

1,236

7%

1,282

3% 

Balance Sheet (in R$ mn)

Assets

1Q26

4Q25

Cash

8,791

10,357

Financial assets

383,856

365,169

Fair value through profit or loss

266,127

239,755

Securities

210,523

198,834

Derivative financial instruments

55,603

40,921

Fair value through other comprehensive income

30,263

42,223

Securities

30,263

42,223

Evaluated at amortized cost

87,467

83,191

Securities

5,740

7,407

Securities purchased under agreements to resell

15,823

17,063

Securities trading and intermediation

9,265

6,299

Accounts receivable

1,161

1,366

Loan Operations

32,328

34,142

Other financial assets

23,150

16,913

Other assets

11,099

10,770

Recoverable taxes

520

443

Rights-of-use assets

347

341

Prepaid expenses

4,530

4,063

Other

5,702

5,923

Deferred tax assets

3,497

3,371

Investments in associates and joint ventures

3,691

3,635

Property and equipment

468

464

Goodwill & Intangible assets

2,908

2,763

Total Assets

414,311

396,528

Liabilities

1Q26

4Q25

Financial liabilities

291,959

276,497

Fair value through profit or loss

73,527

58,590

Securities

23,202

21,043

Derivative financial instruments

50,325

37,547

Evaluated at amortized cost

218,432

217,907

Securities sold under repurchase agreements

61,809

58,714

Securities trading and intermediation

26,271

22,421

Financing instruments payable

117,047

123,404

Accounts payables

890

810

Borrowings

478

238

Other financial liabilities

11,938

12,321

Other liabilities

97,127

95,994

Social and statutory obligations

736

1,365

Taxes and social security obligations

625

853

Retirement plans liabilities

95,171

93,023

Provisions and contingent liabilities

218

192

Other

377

560

Deferred tax liabilities

498

489

Total Liabilities

389,585

372,981

Equity attributable to owners of the Parent company

24,717

23,547

Issued capital

0

0

Capital reserve

24,118

24,009

Other comprehensive income

(387)

(337)

Treasury

(323)

(125)

Retained earnings

1,310

-

Non-controlling interest

8

1

Total equity

24,726

23,548

Total liabilities and equity

414,311

396,528

Non-GAAP Reconciliation 

Bridge from Accounting P&L to Managerial P&L – 1Q26

In R$mm

Accounting P&L

Reclassifications and Adjustments

Managerial P&L

Gross Revenues

4,919

-

4,919

Sales Taxes & Deductions

(245)

59

(186)

Net Revenues

4,674

59

4,733

COGS

(1,554)

-

(1,554)

Gross Profit

3,120

59

3,179

Total SG&A

(1,609)

1

(1,609)

People

(1,096)

-

(1,096)

Non-People

(513)

1

(512)

Depreciation & Amortization

(83)

15

(68)

Interest expense on debt

(103)

-

(103)

Share of profit in joint ventures and associates

19

-

19

EBT

1,343

74

1,418

Tax expense

(26)

(74)

(100)

Net Income

1,318

-

1,318

Non-GAAP Reconciliation of Adjusted Net Income

Adjusted Net Income is a financial measure that reflects the company’s net income, excluding certain non-recurring or non-cash items that management believes do not reflect the company’s core operating performance. In the current period, this includes adjustments related to social charges and deferred tax assets associated with Performance Stock Units (PSUs) that expired unvested.

These adjustments exclude accounting charges that neither impact cash flow nor reflect recurring earnings volatility. By removing these effects, Adjusted Net Income provides a more accurate view of the company’s underlying profitability.

Additionally, in 4Q25, Adjusted Revenue (+R$13mm) and Adjusted SG&A (-R$3mm) also resulted in an Adjusted EBT. These financial measures exclude certain items that management believes are not indicative of the company’s core operating performance. These adjustments relate to one-off impacts from hedging social charges associated with share-based compensation expenses.

By excluding these items, Adjusted Revenue and Adjusted Expenses offer a more accurate representation of the company’s recurring operating results, facilitating comparability across reporting periods.

(in R$ mn)

1Q26

1Q25

YoY

4Q25

QoQ

Net Income

1,318

1,236

7%

1,282

3%

Hedge of Social Charges

-

-

-

13

-

Social Charges / Hedge of Social Charges

-

-

-

(3)

-

Tax Expenses

-

-

-

39

-

Adjusted Net Income

1,318

1,236

7%

1,331

-1%

More News From XP Inc.

SÃO PAULO--(BUSINESS WIRE)--XP Inc. (Nasdaq: XP), announced, in a planned and mutually agreed succession, a transition in its Chief Financial Officer role as part of the Company’s continued evolution and next phase of growth. Mr. Gustavo Alejo Viviani has been appointed by the Board of Directors of the Company (the “Board”) to serve as the Company’s new Chief Financial Officer, effective August 3, 2026. The Company believes that Mr. Alejo brings the expertise, skillset and experience needed to support XP in its continued growth and the execution of its long-term strategy.

Mr. Alejo began his career in January 1996 at Citibank Brasil. In January 2000, he joined Santander Brasil, where over 26 years he held various leadership positions in Wholesale and Retail Banking. In the Wholesale segment, he served as Managing Director of Corporate and Investment Banking and was responsible for the Wholesale Credit Recovery area. In the Retail segment, he was the Director responsible for Credit Collections and Recovery, and Consumer Lending, also accumulating the role of Retail CFO. In the last 3 years he held the positions of Chief Financial Officer, Investor Relations Officer, and Executive Vice-President responsible for the Consumer Finance Business, in addition to having served as a member of the Board of Directors of Zurich Santander Brasil. He is a CFA Charterholder, holds a degree in Economics and extension programs in Business Administration at the University of California-Berkeley, Advanced Corporate Finance at the London Business School, and Leadership at The University of Chicago Booth School of Business.

The Company also announced that, as part of the planned transition process, Mr. Victor Andreu Mansur Farinassi will step down from his position as Chief Financial Officer effective May 31, 2026. The Board has appointed XP’ Chief Executive Officer, Thiago Maffra to serve as interim Chief Financial Officer, effective upon Mr. Mansur’s departure. Mr. Maffra will oversee the Company's financial operations until Mr. Alejo takes office and will assist with the transition to the incoming CFO, ensuring continuity across XP´s finance function.

André Parize will continue in his role as Investor Relations Officer of the Company, ensuring full continuity in XP’s engagement with the investment community.

The Company expresses its sincere gratitude to Mr. Mansur for his more than 14 years of dedication and his meaningful contributions to XP’s growth and strategic development throughout his tenure. The Company wishes Mr. Mansur continued success in his future endeavors.

About XP

XP is a leading, technology-driven platform and a trusted provider of low-fee financial products and services in Brazil. XP’s mission is to disintermediate the legacy models of traditional financial institutions by:

Educating new classes of investors; Democratizing access to a wider range of financial services; Developing new financial products and technology applications to empower clients; and Providing high-quality customer service and client experience in the industry in Brazil. XP provides customers with two principal types of offerings, (i) financial advisory services for retail clients in Brazil, high-net-worth clients, international clients and corporate and institutional clients, and (ii) an open financial product platform providing access to over 800 investment products including equity and fixed income securities, mutual and hedge funds, structured products, life insurance, pension plans, real-estate investment funds (REITs) and others from XP, its partners and competitors.

Forward Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," “aim,” "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond XP Inc’s control. XP, Inc’s actual results could differ materially from those stated or implied in forward-looking statements due to several factors, including but not limited to: competition, change in clients, regulatory measures, a change the external forces among other factors.

More News From XP Inc.

XP Inc. (XP) Q1 2026 Earnings Call Transcript

I reiterate my buy rating on XP Inc., citing sector leadership and compelling valuation at 7.4x forward earnings. XP's Q1 results showed mixed performance: net revenue +8% YoY, EBT margin at 30%, but fixed income revenue declined 25% YoY. Operational challenges include slower revenue growth, rising expenses, and a lower take rate, but management expects normalization next quarter.

Investors with an interest in Financial - Miscellaneous Services stocks have likely encountered both XP Inc.A (XP - Free Report) and Futu Holdings Limited Sponsored ADR (FUTU - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

XP Inc.A has a Zacks Rank of #2 (Buy), while Futu Holdings Limited Sponsored ADR has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that XP has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

XP currently has a forward P/E ratio of 8.07, while FUTU has a forward P/E of 9.63. We also note that XP has a PEG ratio of 0.53. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FUTU currently has a PEG ratio of 1.01.

Another notable valuation metric for XP is its P/B ratio of 1.9. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FUTU has a P/B of 2.72.

These metrics, and several others, help XP earn a Value grade of A, while FUTU has been given a Value grade of C.

XP has seen stronger estimate revision activity and sports more attractive valuation metrics than FUTU, so it seems like value investors will conclude that XP is the superior option right now.

Williams Sonoma Inc (NYSE:WSM) posted first-quarter 2026 revenue of $1.81 billion, up 4.4% year over year and slightly ahead of analyst estimates of $1.80 billion, as comparable sales growth across all four major brands signaled broad demand for premium home furnishings.

Net income was $231.4 million, flat compared to the prior-year period, while operating margin came in at 16.2%, down 60 basis points year over year due to higher selling, general and administrative costs.

The company beat earnings per share estimates by approximately $0.13, or roughly 7%.

West Elm was the standout performer with comparable sales growth of 8.5%, which Jefferies analysts attributed in part to initial buzz surrounding a collaboration with influencer Emma Chamberlain. The Williams Sonoma brand posted 5% comparable growth, Pottery Barn Kids and Teen rose 4.5%, and Pottery Barn added 1%.

Gross margin of 43.9% came in ahead of consensus, as supply chain efficiencies and occupancy expense leverage offset merchandise margin pressure. SG&A as a percentage of sales was 27.8%, missing estimates due to higher employment and general and administrative expenses.

Operating cash flow rose 31.4% to $156.3 million, and the company returned $373 million to shareholders during the quarter.

Inventories increased 9% year over year to $1.46 billion, which the company characterized as supporting future growth.

For fiscal 2026, Williams Sonoma maintained its revenue growth outlook of 2.7% to 6.7% and an operating margin range of 17.5% to 18.1%. Jefferies noted the guidance assumes elevated oil prices, no tariff refunds, and all existing tariffs remaining in place.

The company also announced a leadership change at Pottery Barn, promoting Jennifer Kellor to president. Monica Bhargava is no longer with the company.

Williams-Sonoma, Inc. (WSM) Q1 2027 Earnings Call Transcript

Williams-Sonoma (WSM) delivered Q1 FY26 revenue and EPS above analyst expectations, driving a 6.5% share price jump. WSM's growth was broad-based across all brands, with West Elm leading at 7.8% revenue growth and strong comparable sales. The company maintains a debt-free balance sheet, over $1B in cash, robust buybacks, and a 15% dividend increase.

Williams-Sonoma Today

WSM

Williams-Sonoma

$222.83 +4.09 (+1.87%)

As of 03:52 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$152.20▼

$224.33Dividend Yield1.18%

P/E Ratio24.96

Price Target$211.47

Williams-Sonoma NYSE: WSM faces headwinds like any retailer this year, but it has several things going for it that most retailers don’t. Williams-Sonoma’s brand quality, growing portfolio, and consumer segment position it for strength across all cycles, particularly in its cash flow and capacity for capital returns.

Add in forward-looking, industry-savvy management, and the stage is set for outperformance and an uptrending stock price. The 2026 price action put this market in the Buy Zone ahead of the Q1 earnings release, and the release triggered a Buy signal, with the potential to set fresh highs.

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Williams-Sonoma: Cautious Guidance Stands OutWilliams-Sonoma had a solid Q1, with revenue up 4.3% to $1.85 billion. The top-line outperformance is slim but is compounded by internal metrics, including comp strength and margin. The company reported growth across all brands and segments, led by an 8.5% increase at West Elm, followed by a 5% increase at Williams-Sonoma, a 4.5% increase at Pottery Barn Kids, and a 1% increase at Pottery Barn. Strength was also noted in retail and direct-to-consumer channels.

Margin news was mixed, but favorable to investors. The company experienced gross margin pressure to the tune of 30 basis points (bps) and higher SG&A expenses. The caveat is that gross margin impairment and expense increases were lower than expected, leaving net income down year over year (YOY) but well ahead of consensus forecasts. The critical detail is that net income and cash flow are sufficient to sustain the robust capital return, and that GAAP earnings of $1.93 are approximately 500 basis points above MarketBeat’s reported consensus and up from last year.

Guidance was a catalyst for the market. The company chose to reaffirm its previous guidance, despite the clear strength and addition of Dormify. Dormify is a web-based collection of curated items specifically for college students. Factors leading to the guidance decision include macro uncertainty, with tariff pressures expected to be front-loaded and easing by year’s end. The market response revealed a more optimistic look and a high probability that guidance will be exceeded.

Williams-Sonoma’s Capital Return Is Why You Own ItAfter its growth, Williams-Sonoma’s capital return is the second reason to own it. The company pays a dividend of 1.3% annualized as of late May and aggressively buys back shares. The Q1 activity reduced the count by 1.4%, resulting in a 3.9% YOY reduction, and buybacks are expected to continue. The pace may slow; even so, it will continue to provide leverage for a long time, reducing the share quarterly unless there is a major change in market dynamics. The balance sheet reflects an aggressive share count reduction, with cash and equity down, but it remains in fortress-like condition, with no long-term debt, low total liabilities and unimpeded cash flow.

Overall MarketRank™71st Percentile

Analyst RatingModerate Buy

Upside/Downside4.3% Downside

Short Interest LevelBearish

Dividend StrengthStrong

News Sentiment0.93 Insider TradingSelling Shares

Proj. Earnings Growth8.99%

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Institutional and analyst activity highlight the strength of Williams-Sonoma’s capital return and market position. The institutional group owns virtually 100% of the shares, including a broad base of funds, private, and public capital, and has been accumulating on balance this year. They provide a solid support base, limiting downside risk, while analysts are leading the market higher. The group of 17 MarketBeat tracks rates the stock as a consensus Moderate Buy and sees it advancing a moderate single-digit amount. Price target revisions triggered by the guidance update would be sufficient to put this market at a fresh high.

The post-release price action was very bullish. The market surged by nearly 15% the week of the release, confirming support at a critical level. The indicators align with a bullish entry, in this case a trend-following entry, and a market with room to run higher. Although there is potential for resistance at $205, the likely target is the range top near $220. A move above that is likely but may not come until later in the year.

Williams-Sonoma catalysts include the potential to outperform guidance, the impact of oil prices, and supply chain efficiencies. The company shows clear momentum and will likely outperform in the upcoming quarters. The strength of outperformance depends, in part, on oil prices and their effects on inflation and consumer habits. As it stands, Williams-Sonoma’s consumer base remains resilient, and higher input costs are being offset by supply chain efficiency. AI is central to the improvement, helping allocate inventory near demand centers, offering pricing adjustments to clear unwanted merchandise, optimizing freight usage, and helping reduce return volumes with curated recommendations and improved customer satisfaction.

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Williams-Sonoma (WSM - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.

Over the past month, shares of this seller of cookware and home furnishings have returned +13.5%, compared to the Zacks S&P 500 composite's +6% change. During this period, the Zacks Retail - Home Furnishings industry, which Williams-Sonoma falls in, has lost 3.7%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

Williams-Sonoma is expected to post earnings of $2.03 per share for the current quarter, representing a year-over-year change of +1.5%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.8%.

The consensus earnings estimate of $9.31 for the current fiscal year indicates a year-over-year change of +5.3%. This estimate has changed +1.1% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $10.16 indicates a change of +9.2% from what Williams-Sonoma is expected to report a year ago. Over the past month, the estimate has changed +0.1%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Williams-Sonoma is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

For Williams-Sonoma, the consensus sales estimate for the current quarter of $1.92 billion indicates a year-over-year change of +4.3%. For the current and next fiscal years, $8.16 billion and $8.51 billion estimates indicate +4.5% and +4.4% changes, respectively.

Last Reported Results and Surprise HistoryWilliams-Sonoma reported revenues of $1.81 billion in the last reported quarter, representing a year-over-year change of +4.4%. EPS of $1.93 for the same period compares with $1.85 a year ago.

Compared to the Zacks Consensus Estimate of $1.8 billion, the reported revenues represent a surprise of +0.05%. The EPS surprise was +7.22%.

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Williams-Sonoma is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Williams-Sonoma. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Explore the exciting world of Williams-Sonoma (WSM +1.89%) with our contributing expert analysts in this Motley Fool Scoreboard episode. Check out the video below to gain valuable insights into market trends and potential investment opportunities!
*Stock prices used were the prices of April 8, 2026. The video was published on June 8, 2026.

Anand Chokkavelu has no position in any of the stocks mentioned. Dan Caplinger has no position in any of the stocks mentioned. Jason Hall has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Williams-Sonoma. The Motley Fool has a disclosure policy.

Key Takeaways Lifetime Brands' Q1 net sales rose 2.4% y/y to $143.5 million.Home Solutions sales jumped 22.9% as Macassa and Elements gained traction.The Dolly Parton brand is expected to grow in 2026 as distribution expands. Lifetime Brands (LCUT - Free Report) delivered solid sales growth in the first quarter of 2026, reflecting strong performance across several of its core product categories. Net sales increased 2.4% year over year to $143.5 million, supported by pricing actions, product innovation and improved operational execution. Management highlighted that investments in new products, supply-chain efficiency and cost discipline continue to drive the results.

Kitchen tools remained the company’s largest category and a major contributor to growth. Farberware continued to perform well across retail channels, while KitchenAid showed improving momentum following market-share disruptions in recent years. The relaunch of the Farberware kitchen tools line and the introduction of KitchenAid storage products received encouraging customer response, supporting management’s confidence in continued category growth through the remainder of the year.

Home decor also delivered impressive results, benefiting from years of investment in product development and brand expansion. Brands such as Macassa and Elements continued gaining traction, while strong sell-through in warehouse clubs and dollar stores helped drive broader retailer interest. These trends contributed to a 22.9% increase in the Home Solutions segment, highlighting home decor’s growing importance within the company’s portfolio.

Additional growth came from the Dolly Parton brand, which spans home decor, kitchen tools, cutlery and dinnerware. After generating approximately $18 million in sales in 2025, the brand is expected to post substantial growth again in 2026 as distribution expands across additional retail channels. The company also benefited from a continued recovery in flatware sales as prior tariff-related shipment disruptions eased.

Management expects these growth drivers to remain intact throughout 2026. Continued momentum in kitchen tools, home decor, branded partnerships and international operations should support the company’s fiscal 2026 sales guidance of $650-$700 million while reinforcing Lifetime Brands’ position across its core product categories.

ARHS & WSM’s Sales Picture vs. LCUTArhaus (ARHS - Free Report) reported first-quarter 2026 net revenues of $314 million, up 0.9% year over year and marking the highest first-quarter revenues in its history. Arhaus saw strength across custom upholstery, outdoor furniture, product launches, and its interior design and trade channels, which continued to drive higher-value projects and customer engagement. Management noted strong customer response to its expanded product assortment and outdoor collections.

Arhaus reiterated its 2026 outlook, projecting net revenues of $1.43-$1.47 billion, indicating growth of 3.7-6.6%, supported by improved inventory availability, marketing initiatives and continued momentum in design and trade businesses.

Williams-Sonoma (WSM - Free Report) delivered a strong first-quarter fiscal 2026, with net revenues rising to $1.81 billion and comparable sales increasing 4.8%. Growth was broad-based across the portfolio, with all brands posting positive comps, including strong performances from West Elm, Williams-Sonoma and Pottery Barn Kids. Williams-Sonoma also saw strength in both furniture and non-furniture categories, while its B2B division grew 13.7%, supported by robust trade and contract business demand.

Looking ahead, Williams-Sonoma reiterated its fiscal 2026 outlook, expecting comparable revenue growth of 2-6%, total revenue growth of 2.7-6.7% and an operating margin of 17.5-18.1%, reflecting confidence in its growth initiatives despite macroeconomic uncertainty.

LCUT’s Price Performance, Valuation & EstimatesLifetime Brands’ shares have skyrocketed 192.1% in the past three months against the industry’s decline of 5%.

Image Source: Zacks Investment Research

From a valuation standpoint, LCUT trades at a forward price-to-sales ratio of 0.30X, below the industry’s average of 2.83X. It has a Value Score of A.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for LCUT’s fiscal 2026 earnings implies a year-over-year decline of 9.9%, whereas the same for fiscal 2027 indicates an uptick of 36.3%. Estimates for fiscal 2026 and 2027 have been revised upward by 16 cents and 26 cents, respectively, in the past 30 days.

Image Source: Zacks Investment Research

Lifetime Brands currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Retail-Home Furnishings industry continues to navigate a challenging operating environment. Elevated mortgage rates and sluggish housing-market activity are restraining demand for furniture and other large home-related purchases. Consumer spending remains selective, particularly among middle-income shoppers, resulting in softer sales trends across parts of the industry. In addition, tariff-related uncertainties and a volatile macroeconomic backdrop continue to pressure costs and complicate inventory and sourcing decisions. Although demand from higher-income consumers has helped support premium product categories, overall industry conditions remain mixed and recovery visibility is still limited.

That said, the industry is showing gradual signs of stabilization, supported by ongoing digital transformation and strategic repositioning. Technology-driven initiatives such as augmented reality shopping tools, AI-powered personalization and mobile-first engagement strategies are enhancing customer experience and supporting sales. Companies like Williams-Sonoma, Inc. (WSM - Free Report) , Alliance Laundry Holdings Inc. (ALH - Free Report) and FGI Industries Ltd. (FGI - Free Report) are leveraging product innovation, disciplined cost management and targeted marketing efforts to strengthen brand positioning and capture market share over the long term.

Industry Description The Zacks Retail-Home Furnishings industry comprises retailers offering home furnishing products under various categories. The merchandise assortment includes furniture, garden accessories, framed art, lighting, mirrors, candles, tableware, lamps, picture frames, bathware, accent rugs, artificial floral products, and child and teen furnishing. The industry players also develop, manufacture, market and distribute bedding products. The companies provide home and security products for residential home repair, remodeling, new construction and security applications. They are involved in manufacturing, assembling and selling faucets, accessories, kitchen sinks and waste disposal.

3 Trends Shaping the Future of the Retail-Home Furnishings Industry Macroeconomic Challenges: The companies continue to face significant macroeconomic challenges, primarily stemming from a weak housing market and persistently high interest rates that weigh on consumer spending for big-ticket home furnishings. Many homeowners remain reluctant to sell or move due to high mortgage rates, which suppresses housing turnover — traditionally a key driver of furniture and home furnishings demand. When fewer people move, the high-value furniture purchase cycle slows, and retailers often need to lean more on replacement demand or smaller ticket items.

Also, inflationary pressures and tariff volatility further complicate the landscape, with the industry players noting that its incremental tariff rates have doubled since first-quarter 2025, creating cost headwinds and margin risks. While selective price increases and supply chain efficiencies have been helping, rising import duties and global trade uncertainties make long-term sourcing and pricing strategies difficult to plan. These challenges mirror broader pressures across the U.S. retail home furnishings industry.

Also, fierce competition in the home furnishings space is intensifying, with online giants like Amazon and Wayfair, specialty retailers, and direct-to-consumer brands pressuring traditional stores. Competition in the home furnishings space remains fierce. Retailers face mounting pressure from big-box chains, off-price operators emphasizing a value-driven, discovery-focused shopping experience, and digital-native players that continue to invest aggressively in expansion. In response, several companies are relying more heavily on discounting, extended financing options and sustained promotional campaigns to protect market share. While these strategies may help drive traffic and sales volumes, they also increase pricing pressure and can weigh on margins over time.

Online Growth, Tech platforms, Digital Services & Personalization: Continuing acceleration in online furniture shopping, combined with cutting-edge solutions like room visualizers and AR, unlocks strong growth potential. Major platforms, like Wayfair, Amazon and Williams-Sonoma, are investing heavily in AI driven personalization and immersive user experiences. Features like augmented reality (AR) room visualizers, virtual reality showrooms, and mobile first shopping are reshaping the consumer journey. Companies leading innovation in these areas are well positioned to capture share as convenience and digital engagement become critical in buying decisions.

Gen Z and millennials value customization. Services such as AI-driven design apps, virtual interior consulting, and bundling (such as packaged room solutions) will help the companies boost margins. For example, Lowe’s acquisition of Artison Design (a home furnishing design/install company) signals that offering full-service packages is lucrative. Furniture retailers can similarly offer in-home assembly, design subscription services, or AR “try-before-you-buy” apps to increase attachment rates and customer loyalty.

Strong Product Reinvention & Marketing Moves: Product innovation plays a pivotal role in market share gain in this industry. Companies aim to come up with products and collaborate with celebrated brands and designers to maintain exclusivity. Also, customer experience is being enhanced by innovative marketing techniques, with an emphasis on digital marketing, better merchandising, store remodeling and loyalty programs. The companies are also going for strategic omnichannel expansion. Even digitally native retailers are exploring brick-and-mortar formats to enhance brand visibility and customer experience. Wayfair’s first large-format store in Illinois exemplifies this hybrid approach. Meanwhile, premium players like RH (RH - Free Report) continue expanding showrooms that blend physical touchpoints with high-end brand storytelling.

Zacks Industry Rank Depicts Bleak Prospects The Zacks Retail-Home Furnishings industry is a 10-stock group within the broader Zacks Retail-Wholesale sector. The industry currently carries a Zacks Industry Rank #209, which places it in the bottom 15% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a lower earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Since March 2026, the industry’s earnings estimates for 2026 and 2027 have decreased to $10.76 per share (from $10.80) and $11.66 per share (from $11.81), respectively.

Despite limited near-term visibility, we highlight a few stocks that investors may consider adding to their portfolios. First, we examine the industry’s shareholder returns and current valuation backdrop.

Industry Lags the Sector & S&P 500 The Zacks Retail-Home Furnishings industry has underperformed the broader Zacks Retail-Wholesale sector and the Zacks S&P 500 Composite over the past year.

Over the past year, the industry has lost 18% against the broader sector’s 4.2% growth. The Zacks S&P 500 Composite has gained 26.6% in the same time frame.

One-Year Price Performance

Industry's Current Valuation On the basis of the forward 12-month price-to-earnings ratio, which is commonly used for valuing retail home furnishing stocks, the industry is currently trading at 18.52 compared with the S&P 500’s 21.5 and the sector’s 23.08.

Over the last five years, the industry has traded as high as 25.26X and as low as 14.28X, with the median being 20.2X, as the chart below shows.

Industry's P/E Ratio (Forward 12-Month) Versus S&P 500

Industry’s P/E Ratio (Forward 12-Month) Versus Sector

3 Retail-Home Furnishings Stocks to Keep an Eye On We have highlighted three stocks from the industry that are capitalizing on fundamental strengths and have solid growth prospects.

FGI Industries: Based in East Hanover, NJ, FGI Industries provides bath and kitchen products to customers across North America, Europe and other international markets. FGI Industries’ growth prospects are centered on its Brands, Products and Channels or BPC strategy, which is aimed at driving organic growth through new product introductions, geographic expansion and broader sales-channel penetration. The company is gaining traction with products such as FLUSH GUARD and continues to expand the dealer network and geographic reach of its Covered Bridge Cabinetry business. Growth opportunities in India, the United Kingdom and Europe, where first-quarter 2026 revenue increased year over year, provide additional runway. FGI is also benefiting from positive momentum in its Bath Furniture and Shower Systems businesses, supported by new customer wins. Its capital-light operating model, focus on innovation and potential bolt-on acquisitions further support long-term growth and margin expansion.

The FGI Industries stock — currently carrying a Zacks Rank #1 (Strong Buy) — has gained 102.8% over the past year. FGI Industries has seen an upward estimate revision for 2026 bottom line to 72 cents loss per share from $1.06 over the past 60 days. This company surpassed earnings estimates in two of the trailing four quarters, the average being 151.7%. For 2026, the Zacks Consensus Estimate for the company’s 2026 bottom line indicates an improvement from a year ago level of $3.20 loss per share. It has a VGM Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.

Price and Consensus: FGI

Alliance Laundry: Based in Ripon, WI, this company manufactures and sells commercial laundry equipment across North America, Europe and Asia. Alliance Laundry’s growth prospects are supported by its resilient, replacement-driven commercial laundry business, which benefits from steady demand across laundromats, multi-housing communities, on-premise laundry and commercial-in-home markets. The company continues to gain from fleet modernization, with customers increasingly adopting higher-capacity and digitally connected equipment. Growth is also being fueled by strong momentum in Europe and Asia-Pacific, expanding adoption of its digital platform, a rising connected-machine installed base and increasing use of its Scan/Pay/Wash cashless solution. Alliance’s local-for-local manufacturing strategy, ongoing product innovation, disciplined pricing and selective acquisitions further strengthen its long-term growth outlook.

The ALH stock — currently carrying a Zacks Rank #2 (Buy) — has gained 5.4% over the past year. Alliance Laundry has seen an upward estimate revision for 2026 earnings to $1.29 per share from $1.17 over the past 30 days. The estimated figure for 2026 indicates 26.5% year-over-year growth.  This company surpassed earnings estimates in all three trailing quarters, the average being 20.6%. It has a VGM Score of B.

Price and Consensus: ALH

Williams-Sonoma: This is a San Francisco, CA-based multi-channel specialty retailer. Williams-Sonoma has been gaining from strong momentum across its brand portfolio, expanding B2B operations, emerging brands and digital initiatives. The company continues to benefit from product innovation, exclusive collaborations, personalized shopping experiences and AI-driven enhancements across customer engagement, merchandising and supply chain operations. Growth in trade and contract businesses, rising demand for Williams-Sonoma Home, expansion opportunities for brands like Rejuvenation, Mark and Graham, GreenRow and Dormify, and continued strength in international markets provide additional tailwinds. Management remains confident in gaining market share through differentiated products, omnichannel capabilities and a robust pipeline of new offerings and experiences.

The WSM stock — currently carrying a Zacks Rank #3 (Hold) — has gained 34.8% over the past year. Nonetheless, Williams-Sonoma has seen an upward estimate revision for fiscal 2026 earnings to $9.34 per share from $9.24 over the past 30 days. This company surpassed earnings estimates in all the trailing four quarters, the average being 7.2%. The estimated figure for fiscal 2026 indicates 5.7% year-over-year growth. It has an ROE of 53.3%.

Price and Consensus: WSM

A month has gone by since the last earnings report for Watsco (WSO - Free Report) . Shares have lost about 9.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Watsco due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.

Watsco Q4 Earnings & Revenues Lag Estimates, Gross Margin Up Y/YWatsco reported lower-than-expected fourth-quarter 2025 results with earnings and revenues missing the Zacks Consensus Estimate and decreasing year over year.

The quarterly results reflect reduced demand volumes for HVAC equipment and products, with the return of seasonality pulling back the numbers further. Also, a weaker consumer spending environment and a slowdown in housing activity are concerning.

The bottom line was adversely impacted by reduced leverage from the top line, despite several pricing optimizations and reduced expenses.

Inside WSO’s Q4 HeadlinesThe company reported earnings of $1.68 per share, missing the Zacks Consensus Estimate of $1.94 by 13.4% and declining 29.1% year over year from $2.37 per share.

Revenues of $1.58 billion also missed the consensus mark of $1.61 billion by 1.9% and tumbled year over year by 10%.

Segment-wise, HVAC equipment (67% of sales) fell 13%, and other HVAC products (29% of sales) declined 4%, somewhat offset by 5% growth in commercial refrigeration sales (4% of sales).

Watsco’s Margins and ProfitabilityGross profit of $428.4 million was down from $468.1 million reported in the year-ago quarter. However, the gross margin expanded 40 basis points to 27.1%, driven by effective pricing and product mix optimization.

Operating income declined 25.5% year over year to $101.5 million, with operating margin contracting 140 bps to 6.4%.

Selling, general and administrative expenses inched down 1.7% to $332.6 million.

WSO’s 2025 HighlightsDuring the year, revenues declined year over year by 5% to $7.24 billion, with earnings per share reducing 7.9% to $12.25.

Gross profit decreased 1% to $2 billion, but gross margin expanded 120 bps to 28%. Operating income also declined 8% to $720 million from 2024, with the operating margin of 10% contracting 30 bps.

WSO’s Balance Sheet and LiquidityAs of 2025, Watsco had $433.3 million in cash and cash equivalents, down from $526.3 million at the end of 2024. As of Dec. 31, 2025, net cash provided by operating activities was down to $569.6 million from $773.1 million as of Dec. 31, 2024. The company reported no long-term debt, underscoring its conservative capital structure.

How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -7.23% due to these changes.

VGM ScoresAt this time, Watsco has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock has a grade of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Watsco has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.