X FINANCIAL-ADR (NYSE:XYF) emerged from our Peter Lynch-inspired stock screen as a potential candidate for long-term investors seeking growth at a reasonable price. The company, which operates a technology platform for personal finance services in China, demonstrates strong profitability, manageable debt, and an attractive valuation.
Key Strengths
- Earnings Growth: XYF has delivered a solid 5-year average EPS growth of 16.75%, aligning with Peter Lynch’s preference for sustainable but not excessive growth.
- Attractive Valuation: With a PEG ratio of 0.23 (well below Lynch’s threshold of 1), the stock appears undervalued relative to its growth prospects.
- Strong Profitability: The company boasts a 23.51% Return on Equity (ROE), indicating efficient use of shareholder capital.
- Healthy Balance Sheet: A Debt/Equity ratio of 0.39 suggests conservative leverage, while a Current Ratio of 1.36 reflects sufficient liquidity.
Fundamental Highlights
XYF’s financial health is further supported by strong margins, including an Operating Margin of 62.29% and a Profit Margin of 24.76%, both ranking near the top of its industry. While dividend payouts are modest, the company’s focus on reinvestment aligns with growth-oriented strategies.
For a deeper look, review the full fundamental analysis report.
Our Peter Lynch Strategy screener lists more stocks that fit this approach and is updated regularly.
Disclaimer
This is not investing advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.
