Why was the market not happy with Banco Inter's balance sheet (BIDI11) even after an increase of 579.5% in profit?

Charlie Taylor

In the balance of the second quarter, Banco Inter (BIDI11) reported a profit of R$ 18.2 million, a result seven times higher than last year. Despite this, the market's expectation has not been met. This is because the share price is high, even more so compared to the bank's profit. In addition, analysts expected a very high increase, putting the price-earnings ratio (P/E) even closer. Taking into account the stock analysis, whose main indicator is the P/E, the price-earnings ratio Banco Inter is at 2,034.9. In other words, fintech would take about 2034 years to reimburse the entire amount to its shareholders. On the other hand, traditional banks such as Santander (SANB11) and Itaú (ITUB4) have a price-earnings ratio of 9.70 and 10.09 . That is, the cost can be accounted for in a person's lifetime. According to BTG Pactual, this price-profit ratio is expected to reduce by the end of 2022 to 324.3. In 2022, the expectation is that it drops to 85.3. Thus, getting closer to some companies such as, for example, Weg (WEGE3). Since Inter's profit expectation is based on an extremely high  business model for the digital banking market. Banco Inter's headquartersAfter the unsatisfactory delivery in Banco Inter's quarterly balance sheet, BIDI11 shares fell by 6.16 % on the Stock Exchange. Therefore, the reason for the market's dissatisfaction with the digital bank is, above all, for not having achieved the expected projections.

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