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

QIFU TECHNOLOGY INC (NASDAQ:QFIN) was identified by our Decent Value stock screener, which looks for companies with solid valuation metrics while maintaining healthy profitability, financial strength, and growth potential. QFIN stands out as a stock that may be trading below its intrinsic value, making it an interesting candidate for value investors.

Valuation

QFIN appears attractively priced based on several key metrics:

• P/E Ratio: At 6.40, QFIN’s P/E is well below both the industry average (21.24) and the S&P 500 (27.29).
• Forward P/E: The forward P/E of 4.95 suggests further earnings growth is expected.
• Enterprise Value/EBITDA: The company trades at a discount compared to 84.6% of its peers in the Consumer Finance industry.
• PEG Ratio: A low PEG ratio indicates that the stock is reasonably priced relative to its expected earnings growth.

Financial Health

QFIN demonstrates strong financial stability:

• Debt Management: A Debt/Equity ratio of 0.27 is well below industry norms, indicating a conservative capital structure.
• Liquidity: A Current Ratio of 3.08 and Quick Ratio of 3.08 show ample ability to meet short-term obligations.
• Cash Flow: The company generates strong free cash flow, with a Debt/FCF ratio of just 0.60, meaning it could pay off its debt quickly if needed.

Profitability

The company excels in profitability metrics:

• Return on Equity (ROE): At 29.92%, QFIN outperforms 90.4% of its industry peers.
• Operating Margin: A high margin of 45.98% places it among the top performers in its sector.
• Profit Margin: At 38.98%, QFIN ranks better than 96.2% of competitors.

Growth

While not a hyper-growth stock, QFIN maintains steady expansion:

• Past Earnings Growth: EPS grew by 68.6% over the past year and has averaged 20% annually over the last five years.
• Revenue Growth: Revenue increased by 5.1% in the past year, with a 13.2% average annual growth rate over the past five years.
• Future Expectations: Analysts project EPS growth of 18.8% and revenue growth of 8.5% annually in the coming years.

Our Decent Value screener lists more stocks with strong valuations and fundamentals.
For a deeper dive, review the full fundamental report on QFIN.

Disclaimer

This is not investment advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.