X FINANCIAL-ADR (NYSE:XYF) – A GARP Candidate Worth Considering

X FINANCIAL-ADR (NYSE:XYF) surfaced in our Peter Lynch-inspired screen, which identifies companies with sustainable growth and reasonable valuations. The Chinese fintech firm operates a personal finance platform, offering loan products and wealth management services. Its financial metrics suggest a balance of growth, profitability, and sound valuation—key traits for long-term investors.

Growth at a Reasonable Price (GARP) Metrics

• EPS Growth (5Y): 16.75% – The company has delivered consistent earnings growth, aligning with Peter Lynch’s preference for steady but not excessive expansion.
• PEG Ratio (5Y): 0.23 – A PEG below 1 indicates the stock is undervalued relative to its growth, a hallmark of Lynch’s strategy.
• ROE: 21.99% – Strong profitability, well above the 15% threshold Lynch favored.
• Debt/Equity: 0.34 – A conservative capital structure, reducing financial risk.
• Current Ratio: 1.50 – Demonstrates solid liquidity to meet short-term obligations.

Fundamental Strengths

Our fundamental analysis report highlights:

• High Profitability: XYF outperforms most peers in Return on Assets (13.52%) and Return on Invested Capital (32.59%).
• Attractive Valuation: A P/E of 3.82 is well below industry and S&P 500 averages.
• Stable Margins: Operating margins (62.29%) and profit margins (24.76%) are industry-leading.

While XYF lacks long-term dividend history, its growth and financial health make it a compelling candidate for GARP investors.

Our Peter Lynch Strategy screener lists more stocks fitting this strategy and is updated regularly.

Disclaimer

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