INTER & Co, INC. (INTR): what the price requires
At today's price, INTER & Co, INC. (INTR) is priced for 12.7% return on equity. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Exported: 2026-07-20 · Source: https://boothcheck.com/report/INTR
Headline
| Field | Value |
|---|---|
| Ticker | INTR |
| Company | INTER & Co, INC. |
| Sector / Industry | Financial Services |
| Current price | $5.36/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | financials |
| Elite ROE must persist for | 35.3y before normalizing (held at the 12.4% elite tier) |
| Perpetuity-equivalent ROE | 12.7% |
| Return on equity now | 10.2% |
| ROE gap | +2.5pp |
| Price-to-book | 1.37x |
Solve inputs: computed at a 10.4% cost of equity; ROE searched up to the 12.4% ROE ceiling.
Reconcile: at the x-ray's 9.3% required return this reads ~11.2%; the models below use their own rates.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +3.77σ |
| cohort percentile (of 120 peers) | 47 |
| sustained it ~10 years at this level | 67% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 9.03x | 2 | expensive |
| Earnings | 10.54x | 2 | expensive |
| Relative | 6.09x | 3 | expensive |
| Growth | 0.69x | 1 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.2%); the inversion above states its own rate.
Per-Model Detail (n=8)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| Bank Fair Value (P/TBV) | — | $2.02 | 2.65x | yes | TBVPS $4.05 × 0.50x (ROE (TTM) 0.8% / CoE 9.3%, g=0.5% (sustainable: 65% retention × ROE, 5% cap; not the terminal-growth assumption)) |
| Relative Valuation | Relative | $0.88 | 6.09x | yes | P/E 22x (blended: static sector reference 10x + trailing (TTM) 161x), scenarios: 17.6x / 22.0x / 26.4x (bear / base = reference held flat / bull), EV/EBITDA N/Ax |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $0.36 | 14.89x | yes | BV/sh $4.05, ROE (TTM) 0.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $0.19 | 28.21x | yes | 5yr excess ROE then converge to ke=9.3% (excluded from median) |
| Discounted Future Market Cap | Growth | $7.78 | 0.69x | yes | Rev $0.4B, growth 30% (input: historical growth; tapered), Terminal P/S: 4.5x / 5.7x / 6.8x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $0.38 | 14.11x | yes | EPS $0.03, growth 2% (input: historical EPS growth), PEG=80.60 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | $1.69 | 3.17x | yes | √(22.5 × EPS $0.03 × BVPS $4.05) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $1.01 | 5.31x | yes | EPS $0.03 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | — | — | no | — |
| PEG Fair Value | Relative | $1.18 | 4.54x | yes | EPS $0.03 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $0.34 | 15.76x | yes | EPS $0.03 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
Deposit/float-funded balance sheet: debt is funding, not corporate leverage, and GAAP operating cash flow follows loan flows. Net-debt, interest-coverage, and cash-burn lenses do not apply. The solvency frame for a financial is regulatory capital and payout capacity (CET1, stress buffer, dividends plus buybacks against earnings).
Bullet Takeaways
- Inter is a Brazilian super-app bank with 44 million clients and R$74 billion of funding growing about 25% a year, and its cost of funding has fallen to 64% of CDI, a deposit engine getting cheaper as it scales.
- At nearly 1.4 times book value the price prices a return on equity in the top tier of banking, held for decades, while the trailing return sits closer to 10.2% and non-performing loans have edged up to 5.1%.
- The next print lands in early August 2026, and Brazil's Selic rate easing from 15% toward roughly 14% will shift the balance between funding cost and credit demand.
Bull Case
Begin where a bank actually lives, on the funding side of the balance sheet. Inter gathers deposits from a base of 44 million clients, and in the first quarter that funding reached R$74 billion, up about 25% on the year, while its cost of funding fell to 64% of CDI from 66% the quarter before. Cheap and growing deposits are the raw material of a bank's profit: the wider the gap between what Inter pays for funding and what it earns on credit, the more each real of loans is worth. A digital bank with no branches, and a My Piggy Bank savings product that has passed 5 million users, is building exactly that kind of low-cost, sticky deposit base.
The profitability has followed the funding. Inter reported a return on equity of 15.5% in the first quarter, a record, with return on tangible equity of 19.5% and return on assets of 1.59%. Set that against where the company began its multi-year plan, when it was losing money, and the trajectory is itself the argument. The efficiency ratio, the share of revenue eaten by costs, has come down from 75% to 44%, which is the mechanical reason returns keep climbing: revenue grows on a cost base that grows more slowly. Management has since set a medium-term goal of a return on equity around 28% by 2029.
There is more to Inter than a lender. The super app bundles banking, investments, a shopping marketplace, insurance, and cross-border accounts, which lifts both revenue per client and the number of products each client holds. That breadth is Inter's answer to a crowded Brazilian market where the largest digital banks chase the same customers. Inter is not the biggest of them, and it does not need to be for this thesis to work: the bet is that a smaller, faster-improving bank keeps compounding its returns as rates normalize and the credit book seasons. Total gross revenue grew 37% year over year to R$4.3 billion in the first quarter, and the credit portfolio passed R$50 billion. A bank earning high-20s returns on a growing equity base is worth far more than one stuck in the low teens, and the whole case is that Inter is walking from the second toward the first.
Bear Case
Strip away the super-app language and look at what the price asks. At $5.36 the market values Inter at nearly 1.4 times its book value, and for a bank that multiple is a claim about returns. It prices a return on equity in the top tier that banks almost never reach, and it asks for that level to hold not for a few strong quarters but far into the future. What Inter has earned on a trailing basis is closer to 10.2%. The latest quarter reached the mid-teens, which is genuine progress, but the price is not paying for one good quarter; it is paying for a level of sustained excellence that even the best banks rarely hold. Among banks that have ever earned a return that high, only about two-thirds kept it going even a decade.
The risks all bear on that requirement. Credit quality is the first: non-performing loans rose to 5.1% from 4.7%, and a bank growing its loan book quickly in a high-rate economy is exactly where sour loans hide until the cycle turns. Brazil's rate backdrop is the second. The Selic policy rate sits at 14.25% after a round of cuts from 15%, with inflation still running above the central bank's ceiling. High rates flatter a deposit-funded bank's spread today, but they also slow the economy and raise the odds that stretched borrowers miss payments, and the easing now under way removes some of that tailwind. A return that has climbed partly because rates are high has to prove it can hold as they fall.
Then there is the crowd. Brazil's digital banking market is among the most contested anywhere, and Inter is not its largest player; the biggest neobanks reach more customers and, for now, earn higher returns on their capital. Inter's super app is a real differentiator, but breadth is expensive to build and to monetize, and the marketplace and insurance lines remain small next to core lending. The valuation math is unforgiving if the returns stall: the methods that value the bank on its book and its current earnings land many multiples below the price, and only a forward-growth path reaches it. Buy here and you are underwriting years of uninterrupted improvement, in a competitive market, through a rate-cutting cycle, with credit costs already drifting up. The balance sheet is not the danger here; the price is.
Valuation
A bank is worth the return it earns on its capital, so the right lens here is price against book, not an earnings multiple. At $5.36 (July 19, 2026) Inter trades at nearly 1.4 times its book value, and that multiple embeds a demanding assumption: a return on equity in the top tier of the global banking industry, held far into the future. That requirement does not resolve into a single sustainable number, which is itself the finding; it sits beyond what even top-tier banks reliably deliver. For reference, Inter has recently earned about 10.2% on its equity, with the latest quarter reaching the mid-teens.
The methods used to triangulate a value nearly all sit far below the price. The ones that value Inter on its book and its excess returns land many times under $5.36; the ones based on current earnings, further still. Only a path that credits years of rapid growth reaches the price, and it does so only by projecting today's pace of improvement well into the future. In plain terms, almost none of the price is explained by what the bank is today; nearly all of it is a claim on what it becomes.
For a bank the balance-sheet question is not net cash or interest coverage, which do not fit a deposit-funded institution; it is capital and the returns on it. Inter funds itself with R$74 billion of client deposits rather than wholesale borrowing, and the cost of that funding has been falling, which is the healthiest possible source of an improving return on equity. The question the price forces is duration: not whether Inter can earn a strong return in a given quarter, but whether a bank of its size, in Brazil's competitive and high-rate market, can hold an elite return for the decades the price is counting on.
Catalysts
Inter's next results land in early August 2026, the second read on whether the first quarter's record profitability holds. That quarter delivered net income of R$395 million, a return on equity of 15.5%, and gross revenue up 37% year over year to R$4.3 billion, alongside 44 million clients and a credit book past R$50 billion. The figures to watch are the ones that drive the thesis: the return on equity, the efficiency ratio, and whether non-performing loans keep drifting up from 5.1%.
The macro backdrop is the swing factor. Brazil's central bank has cut the Selic rate to 14.25% and signaled a data-dependent pause, with year-end forecasts near 14%. Falling rates cut both ways for Inter: cheaper funding and stronger credit demand on one side, a thinner deposit spread and softer rate-sensitive investment revenue on the other. How Inter's margins behave as the cycle turns is the most important external variable over the next several quarters.
Longer term, management has replaced its 2027 plan of 60 million clients, a 30% efficiency ratio, and a 30% return on equity with a new framework it calls the Rule of 50, and set a medium-term return on equity target of around 28% by 2029. Those are ambitions, not results, and the distance between a mid-teens return today and a high-20s return later is the entire debate around the stock.
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Inter Q1 2026 results, May 2026 · Bloomberg, June 2026 · Inter Q1 2026 earnings call, June 2026 · Inter Owners Day 2026 · Inter Rule of 50 framework, 2026 · MarketBeat, 2026 · Bloomberg and Rio Times, June and July 2026