NASDAQ:QFIN is an undervalued gem with solid fundamentals.

Last update: Oct 29, 2024

QIFU TECHNOLOGY INC (NASDAQ:QFIN) has caught the attention of our stock screener as a great value stock. NASDAQ:QFIN excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

Valuation Assessment of NASDAQ:QFIN

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:QFIN, the assigned 8 reflects its valuation:

Based on the Price/Earnings ratio of 8.02, the valuation of QFIN can be described as reasonable.
QFIN's Price/Earnings ratio is a bit cheaper when compared to the industry. QFIN is cheaper than 72.55% of the companies in the same industry.
QFIN's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 31.09.
With a Price/Forward Earnings ratio of 6.21, the valuation of QFIN can be described as very cheap.
QFIN's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. QFIN is cheaper than 78.43% of the companies in the same industry.
QFIN's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.57.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of QFIN indicates a rather cheap valuation: QFIN is cheaper than 86.27% of the companies listed in the same industry.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of QFIN may justify a higher PE ratio.
QFIN's earnings are expected to grow with 19.12% in the coming years. This may justify a more expensive valuation.

Exploring NASDAQ:QFIN's Profitability

ChartMill assigns a Profitability Rating to every stock. This score ranges from 0 to 10 and evaluates the different profitability ratios and margins, both absolutely, but also relative to the industry peers. NASDAQ:QFIN scores a 8 out of 10:

Looking at the Return On Assets, with a value of 10.21%, QFIN belongs to the top of the industry, outperforming 92.16% of the companies in the same industry.
QFIN has a better Return On Equity (21.26%) than 84.31% of its industry peers.
QFIN's Return On Invested Capital of 15.97% is amongst the best of the industry. QFIN outperforms 92.16% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for QFIN is significantly above the industry average of 7.36%.
QFIN has a Profit Margin of 28.08%. This is amongst the best in the industry. QFIN outperforms 92.16% of its industry peers.
With an excellent Operating Margin value of 35.21%, QFIN belongs to the best of the industry, outperforming 94.12% of the companies in the same industry.
QFIN's Gross Margin of 83.44% is amongst the best of the industry. QFIN outperforms 82.35% of its industry peers.

Health Assessment of NASDAQ:QFIN

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:QFIN, the assigned 7 reflects its health status:

QFIN has a debt to FCF ratio of 0.14. This is a very positive value and a sign of high solvency as it would only need 0.14 years to pay back of all of its debts.
QFIN has a Debt to FCF ratio of 0.14. This is amongst the best in the industry. QFIN outperforms 94.12% of its industry peers.
QFIN has a Debt/Equity ratio of 0.05. This is a healthy value indicating a solid balance between debt and equity.
With an excellent Debt to Equity ratio value of 0.05, QFIN belongs to the best of the industry, outperforming 86.27% of the companies in the same industry.
A Current Ratio of 2.45 indicates that QFIN has no problem at all paying its short term obligations.
QFIN has a Current ratio of 2.45. This is in the better half of the industry: QFIN outperforms 76.47% of its industry peers.
A Quick Ratio of 2.45 indicates that QFIN has no problem at all paying its short term obligations.
QFIN has a Quick ratio of 2.45. This is in the better half of the industry: QFIN outperforms 78.43% of its industry peers.

Analyzing Growth Metrics

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:QFIN scores a 7 out of 10:

The Earnings Per Share has grown by an impressive 24.11% over the past year.
Looking at the last year, QFIN shows a quite strong growth in Revenue. The Revenue has grown by 9.80% in the last year.
The Revenue has been growing by 29.65% on average over the past years. This is a very strong growth!
QFIN is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.12% yearly.
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.

Check the latest full fundamental report of QFIN for a complete fundamental analysis.

Disclaimer

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.