NASDAQ:QFIN is not too expensive for the growth it is showing.

QIFU TECHNOLOGY INC (NASDAQ:QFIN) was identified as an affordable growth stock by our stock screener. NASDAQ:QFIN is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Evaluating Growth: NASDAQ:QFIN

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NASDAQ:QFIN has achieved a 8 out of 10:

• QFIN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 40.63%, which is quite impressive.
• Looking at the last year, QFIN shows a quite strong growth in Revenue. The Revenue has grown by 9.41% in the last year.
• Measured over the past years, QFIN shows a very strong growth in Revenue. The Revenue has been growing by 29.65% on average per year.
• 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.

Assessing Valuation for NASDAQ:QFIN

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:QFIN boasts a 9 out of 10:

• A Price/Earnings ratio of 7.50 indicates a rather cheap valuation of QFIN.
• Compared to the rest of the industry, the Price/Earnings ratio of QFIN indicates a rather cheap valuation: QFIN is cheaper than 80.77% of the companies listed in the same industry.
• QFIN's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.79.
• Based on the Price/Forward Earnings ratio of 5.66, the valuation of QFIN can be described as very cheap.
• Based on the Price/Forward Earnings ratio, QFIN is valued cheaper than 88.46% of the companies in the same industry.
• The average S&P500 Price/Forward Earnings ratio is at 23.98. QFIN is valued rather cheaply when compared to this.
• Based on the Enterprise Value to EBITDA ratio, QFIN is valued cheaper than 84.62% of the companies in the same industry.
• QFIN's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. QFIN is cheaper than 63.46% of the companies 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 27.08% in the coming years.

Looking at the Health

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:QFIN has earned 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.
• QFIN has a better Debt to FCF ratio (0.12) than 92.31% of its industry peers.
• A Debt/Equity ratio of 0.05 indicates that QFIN is not too dependend on debt financing.
• QFIN has a Debt to Equity ratio of 0.05. This is amongst the best in the industry. QFIN outperforms 86.54% of its industry peers.
• A Current Ratio of 2.56 indicates that QFIN has no problem at all paying its short term obligations.
• QFIN has a better Current ratio (2.56) than 73.08% of its industry peers.
• QFIN has a Quick Ratio of 2.56. This indicates that QFIN is financially healthy and has no problem in meeting its short term obligations.
• QFIN has a Quick ratio of 2.56. This is in the better half of the industry: QFIN outperforms 75.00% of its industry peers.

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 8 is noteworthy for profitability:

• QFIN has a better Return On Assets (11.62%) than 92.31% of its industry peers.
• The Return On Equity of QFIN (23.90%) is better than 86.54% of its industry peers.
• QFIN has a Return On Invested Capital of 18.00%. This is amongst the best in the industry. QFIN outperforms 96.15% 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 7.34%.
• The Profit Margin of QFIN (31.78%) is better than 92.31% of its industry peers.
• Looking at the Operating Margin, with a value of 40.27%, QFIN belongs to the top of the industry, outperforming 98.08% of the companies in the same industry.
• Looking at the Gross Margin, with a value of 83.13%, QFIN belongs to the top of the industry, outperforming 80.77% of the companies in the same industry.

Our Affordable Growth screener lists more Affordable Growth stocks and is updated daily.

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.