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

Last update: Jan 1, 2025

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.

How do we evaluate the Valuation for NASDAQ:QFIN?

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 8 out of 10:

A Price/Earnings ratio of 7.74 indicates a rather cheap valuation of QFIN.
74.51% of the companies in the same industry are more expensive than QFIN, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of QFIN to the average of the S&P500 Index (27.17), we can say QFIN is valued rather cheaply.
The Price/Forward Earnings ratio is 5.84, which indicates a rather cheap valuation of QFIN.
Based on the Price/Forward Earnings ratio, QFIN is valued cheaply inside the industry as 82.35% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.59, QFIN is valued rather cheaply.
Based on the Enterprise Value to EBITDA ratio, QFIN is valued cheaply inside the industry as 84.31% of the companies are valued more expensively.
QFIN's 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 27.08% in the coming years. This may justify a more expensive valuation.

Profitability Assessment of NASDAQ:QFIN

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:QFIN was assigned a score of 8 for profitability:

Looking at the Return On Assets, with a value of 11.62%, QFIN belongs to the top of the industry, outperforming 92.16% of the companies in the same industry.
Looking at the Return On Equity, with a value of 23.90%, QFIN belongs to the top of the industry, outperforming 86.27% of the companies in the same industry.
QFIN has a better Return On Invested Capital (18.00%) than 96.08% of its industry peers.
The Average Return On Invested Capital over the past 3 years for QFIN is significantly above the industry average of 7.32%.
Looking at the Profit Margin, with a value of 31.78%, QFIN belongs to the top of the industry, outperforming 92.16% of the companies in the same industry.
With an excellent Operating Margin value of 40.27%, QFIN belongs to the best of the industry, outperforming 98.04% of the companies in the same industry.
With an excellent Gross Margin value of 83.13%, QFIN belongs to the best of the industry, outperforming 80.39% of the companies in the same industry.

How We Gauge Health for NASDAQ:QFIN

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:QFIN has achieved a 7 out of 10:

The Debt to FCF ratio of QFIN is 0.12, which is an excellent value as it means it would take QFIN, only 0.12 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.12, QFIN belongs to the best of the industry, outperforming 94.12% of the companies in the same industry.
A Debt/Equity ratio of 0.05 indicates that QFIN is not too dependend on debt financing.
The Debt to Equity ratio of QFIN (0.05) is better than 88.24% of its industry peers.
A Current Ratio of 2.56 indicates that QFIN has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.56, QFIN is doing good in the industry, outperforming 74.51% of the companies in the same industry.
A Quick Ratio of 2.56 indicates that QFIN has no problem at all paying its short term obligations.
QFIN has a better Quick ratio (2.56) than 76.47% of its industry peers.

Growth Examination for NASDAQ:QFIN

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 8 out of 10:

The Earnings Per Share has grown by an impressive 40.63% over the past year.
QFIN shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.41%.
The Revenue has been growing by 29.65% on average over the past years. This is a very strong growth!
The Earnings Per Share is expected to grow by 27.08% on average over the next years. This is a very strong growth
QFIN is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.18% yearly.
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.

More Decent Value stocks can be found in our Decent Value screener.

Our latest full fundamental report of QFIN contains the most current fundamental analsysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.