Inter & Co's Q4 Call Highlights Growth, but DeepValue Analysis Signals Caution on Valuation and Risks

What happened

Inter & Co's Q4 earnings call emphasized robust client growth, higher engagement, and expanding profitability, as reported in the recent article. This aligns with the DeepValue master report, which notes improving operational metrics such as a 14.2% ROE and 45.2% efficiency ratio in 3Q25. However, the report cautions that the stock is already trading near fair value at $8.15, with key risks including a declining capital adequacy ratio of 15.2% and intensifying competition in private payroll lending. The news mentions organizational changes and U.S. platform progress, but these do not immediately address the capital constraints or asset quality pressures highlighted in the report. Therefore, while the call reinforces Inter's growth narrative, it does not substantively alter the investment thesis that advises waiting for a better entry point or clearer evidence of sustainable high ROE.

Implication

The earnings call confirms strong growth and profitability trends, but these are already reflected in the current stock price, limiting near-term upside. Key risk factors, such as the shrinking capital cushion and competitive pressures in private payroll lending, remain unaddressed and could trigger downside if they worsen. Organizational changes may improve long-term efficiency, but their immediate financial impact is uncertain and does not resolve capital adequacy concerns. Progress in the U.S. platform adds growth potential but introduces execution risks and does not alter the core Brazilian market dynamics. Overall, this reinforces the 'WAIT' rating, with better risk-adjusted returns likely on price pullbacks or sustained improvements in ROE and asset quality.

Thesis delta

The core investment thesis remains unchanged; the news confirms existing positive operational trends but does not shift the risk-reward balance or address critical vulnerabilities like capital adequacy and credit cycle exposure. Investors should continue to monitor for signs of sustainably higher ROE above 16% with stable NPLs or a capital ratio drop below 13%, which would necessitate a re-assessment.