When you look at NASDAQ:QFIN, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Last update: Aug 1, 2024

Our stock screening tool has pinpointed QIFU TECHNOLOGY INC (NASDAQ:QFIN) as an undervalued stock option. NASDAQ:QFIN retains a strong financial foundation and an attractive price tag. Let's delve into the specifics below.

Understanding NASDAQ:QFIN's Valuation

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:QFIN has achieved a 9 out of 10:

QFIN is valuated cheaply with a Price/Earnings ratio of 5.08.
QFIN's Price/Earnings ratio is rather cheap when compared to the industry. QFIN is cheaper than 90.38% of the companies in the same industry.
When comparing the Price/Earnings ratio of QFIN to the average of the S&P500 Index (24.50), we can say QFIN is valued rather cheaply.
A Price/Forward Earnings ratio of 4.14 indicates a rather cheap valuation of QFIN.
Based on the Price/Forward Earnings ratio, QFIN is valued cheaply inside the industry as 90.38% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.94, QFIN is valued rather cheaply.
86.54% of the companies in the same industry are more expensive than QFIN, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of QFIN indicates a somewhat cheap valuation: QFIN is cheaper than 63.46% of the companies listed in the same industry.
QFIN's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
QFIN has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as QFIN's earnings are expected to grow with 13.58% in the coming years.

Understanding NASDAQ:QFIN's Profitability

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:QFIN, the assigned 9 is noteworthy for profitability:

QFIN's Return On Assets of 9.52% is amongst the best of the industry. QFIN outperforms 90.38% of its industry peers.
QFIN's Return On Equity of 20.46% is amongst the best of the industry. QFIN outperforms 86.54% of its industry peers.
QFIN's Return On Invested Capital of 15.21% is amongst the best of the industry. QFIN outperforms 94.23% of its industry peers.
QFIN had an Average Return On Invested Capital over the past 3 years of 19.66%. This is significantly above the industry average of 7.19%.
The last Return On Invested Capital (15.21%) for QFIN is well below the 3 year average (19.66%), which needs to be investigated, but indicates that QFIN had better years and this may not be a problem.
With an excellent Profit Margin value of 26.81%, QFIN belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
The Operating Margin of QFIN (30.95%) is better than 90.38% of its industry peers.
QFIN has a Gross Margin of 83.64%. This is amongst the best in the industry. QFIN outperforms 82.69% of its industry peers.

Health Analysis for NASDAQ:QFIN

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:QFIN has earned a 7 out of 10:

QFIN has a debt to FCF ratio of 0.09. This is a very positive value and a sign of high solvency as it would only need 0.09 years to pay back of all of its debts.
QFIN has a better Debt to FCF ratio (0.09) than 92.31% of its industry peers.
A Debt/Equity ratio of 0.03 indicates that QFIN is not too dependend on debt financing.
QFIN has a Debt to Equity ratio of 0.03. This is amongst the best in the industry. QFIN outperforms 84.62% of its industry peers.
A Current Ratio of 2.12 indicates that QFIN has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.12, QFIN is doing good in the industry, outperforming 65.38% of the companies in the same industry.
A Quick Ratio of 2.12 indicates that QFIN has no problem at all paying its short term obligations.
The Quick ratio of QFIN (2.12) is better than 65.38% of its industry peers.

Deciphering NASDAQ:QFIN's Growth Rating

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:QFIN has received a 6 out of 10:

The Earnings Per Share has grown by an nice 17.78% over the past year.
QFIN shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 29.65% yearly.
The Earnings Per Share is expected to grow by 13.58% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.18% on average over the next years. This is quite good.
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of QFIN

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.