QIFU TECHNOLOGY INC (NASDAQ:QFIN) – A Quality Stock Worth Considering

QIFU TECHNOLOGY INC (NASDAQ:QFIN) stands out as a strong candidate for quality investors, meeting key criteria for revenue growth, profitability, and financial health. The company operates in China’s consumer finance sector, providing credit technology services with a focus on sustainable growth and operational efficiency.

Why QFIN Fits the Quality Investing Criteria

• Strong Revenue and EBIT Growth: Over the past five years, QFIN has delivered an annual revenue growth of 8.48% and EBIT growth of 21.07%, indicating not just top-line expansion but also improving operational efficiency.
• High Return on Invested Capital (ROIC): With an ROIC of 21.86%, the company demonstrates an ability to generate strong returns from its capital investments, well above the 15% threshold for quality stocks.
• Low Debt Burden: The Debt-to-Free Cash Flow ratio of 0.60 suggests QFIN can pay off its debt in less than a year using its current cash flow, reflecting a conservative balance sheet.
• Profit Quality: The company converts net income into free cash flow at an impressive rate, with a five-year average profit quality of 141.63%, far exceeding the 75% benchmark.

Valuation and Financial Health

QFIN trades at a P/E ratio of 6.60, well below both industry and S&P 500 averages, suggesting an attractive valuation. The company maintains solid liquidity, with a current ratio of 3.08, and has consistently reduced its share count over the past five years.

Analysts expect earnings to grow by 18.77% annually, reinforcing the case for long-term holding.

Final Thoughts

For investors seeking quality businesses with strong fundamentals, QFIN presents a compelling opportunity. Its combination of growth, profitability, and financial stability aligns well with the principles of quality investing.

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For a deeper dive, review the full fundamental analysis of QFIN.

Disclaimer

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