QIFU TECHNOLOGY INC (NASDAQ:QFIN) – A Potentially Undervalued Stock with Strong Fundamentals

QIFU TECHNOLOGY INC (NASDAQ:QFIN) was identified through a "Decent Value" screen, which highlights stocks with solid valuation metrics while maintaining healthy profitability, growth, and financial stability. The company operates in China’s consumer finance sector, providing credit technology services.

Valuation

QFIN appears attractively priced with a Price/Earnings (P/E) ratio of 6.14, significantly below the industry average of 18.64 and the S&P 500’s 26.31. Its Forward P/E of 4.95 suggests further upside potential. Key valuation highlights:

• 86.5% of industry peers are more expensive based on P/E.
• 80.8% of competitors trade at higher forward P/E multiples.
• A low PEG ratio (accounting for growth) reinforces its undervaluation.

Profitability

The company excels in profitability, scoring 9/10 in ChartMill’s rating system:

• Return on Equity (ROE) of 29.92% outperforms 90.4% of peers.
• Operating Margin of 45.98% ranks in the top 4% of the industry.
• Profit Margin of 38.98% is among the sector’s best.

Financial Health

QFIN maintains a strong balance sheet, earning an 8/10 Health rating:

• Debt/Equity ratio of 0.27 is well below industry averages.
• Current Ratio of 3.08 indicates ample liquidity to cover short-term obligations.
• Debt-to-Free Cash Flow of 0.60 suggests minimal financial strain.

Growth

While growth is moderate, QFIN shows stability:

• EPS grew 68.6% YoY, with a 5-year average growth of 19.96%.
• Revenue increased 5.1% YoY, with a 5-year CAGR of 13.24%.
• Analysts project 16.2% annual EPS growth in coming years.

Our Decent Value screener lists more stocks with similar characteristics. For a deeper dive, review the full fundamental report on QFIN.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.