Affordable Growth. Analyze the stocks which are showing good growth, decent profitability and health and are not overvalued from a fundamental perspective.


QIFU TECHNOLOGY INC

Nasdaq / Financials / Consumer Finance

Fundamental Rating

7

Overall QFIN gets a fundamental rating of 7 out of 10. We evaluated QFIN against 51 industry peers in the Consumer Finance industry. QFIN gets an excellent profitability rating and is at the same time showing great financial health properties. An interesting combination arises when we look at growth and value: QFIN is growing strongly while it also seems undervalued. These ratings could make QFIN a good candidate for value and growth and quality investing.



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1. Profitability

1.1 Basic Checks

In the past year QFIN was profitable.
QFIN had a positive operating cash flow in the past year.
Each year in the past 5 years QFIN has been profitable.
In the past 5 years QFIN always reported a positive cash flow from operatings.

1.2 Ratios

QFIN has a Return On Assets of 10.21%. This is amongst the best in the industry. QFIN outperforms 92.16% of its industry peers.
QFIN has a Return On Equity of 21.26%. This is amongst the best in the industry. QFIN outperforms 84.31% of its industry peers.
The Return On Invested Capital of QFIN (15.97%) is better than 92.16% 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 7.36%.
Industry RankSector Rank
ROA 10.21%
ROE 21.26%
ROIC 15.97%
ROA(3y)12.19%
ROA(5y)12.64%
ROE(3y)26.3%
ROE(5y)30.1%
ROIC(3y)19.66%
ROIC(5y)21.79%

1.3 Margins

QFIN has a better Profit Margin (28.08%) than 92.16% of its industry peers.
QFIN's Profit Margin has been stable in the last couple of years.
QFIN has a better Operating Margin (35.21%) than 94.12% of its industry peers.
QFIN's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 83.44%, QFIN belongs to the best of the industry, outperforming 82.35% of the companies in the same industry.
In the last couple of years the Gross Margin of QFIN has remained more or less at the same level.
Industry RankSector Rank
OM 35.21%
PM (TTM) 28.08%
GM 83.44%
OM growth 3Y2.19%
OM growth 5Y-4.22%
PM growth 3Y0.67%
PM growth 5YN/A
GM growth 3Y-1.74%
GM growth 5Y0.02%

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7

2. Health

2.1 Basic Checks

QFIN has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for QFIN has been reduced compared to 1 year ago.
Compared to 5 years ago, QFIN has more shares outstanding
The debt/assets ratio for QFIN is higher compared to a year ago.

2.2 Solvency

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.
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 86.27% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.05
Debt/FCF 0.14
Altman-Z N/A
ROIC/WACC2.14
WACC7.47%

2.3 Liquidity

QFIN has a Current Ratio of 2.45. This indicates that QFIN is financially healthy and has no problem in meeting 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.
QFIN has a Quick Ratio of 2.45. This indicates that QFIN is financially healthy and has no problem in meeting its short term obligations.
QFIN has a better Quick ratio (2.45) than 78.43% of its industry peers.
Industry RankSector Rank
Current Ratio 2.45
Quick Ratio 2.45

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3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 24.11% over the past year.
QFIN shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 3.42% yearly.
The Revenue has grown by 9.80% in the past year. This is quite good.
QFIN shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 29.65% yearly.
EPS 1Y (TTM)24.11%
EPS 3Y3.42%
EPS 5YN/A
EPS Q2Q%31.8%
Revenue 1Y (TTM)9.8%
Revenue growth 3Y6.29%
Revenue growth 5Y29.65%
Sales Q2Q%6.28%

3.2 Future

The Earnings Per Share is expected to grow by 19.12% 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.
EPS Next Y37.74%
EPS Next 2Y21.43%
EPS Next 3Y19.12%
EPS Next 5YN/A
Revenue Next Year3.32%
Revenue Next 2Y3.31%
Revenue Next 3Y4.63%
Revenue Next 5Y8.18%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

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8

4. Valuation

4.1 Price/Earnings Ratio

QFIN is valuated cheaply with a Price/Earnings ratio of 7.53.
Based on the Price/Earnings ratio, QFIN is valued a bit cheaper than the industry average as 74.51% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of QFIN to the average of the S&P500 Index (30.51), we can say QFIN is valued rather cheaply.
With a Price/Forward Earnings ratio of 5.83, the valuation of QFIN can be described as very cheap.
QFIN's Price/Forward Earnings ratio is rather cheap when compared to the industry. QFIN is cheaper than 80.39% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.39, QFIN is valued rather cheaply.
Industry RankSector Rank
PE 7.53
Fwd PE 5.83

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, QFIN is valued cheaper than 86.27% of the companies in the same industry.
QFIN's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 4.83
EV/EBITDA 4.97

4.3 Compensation for Growth

The 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.
QFIN's earnings are expected to grow with 19.12% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.2
PEG (5Y)N/A
EPS Next 2Y21.43%
EPS Next 3Y19.12%

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3

5. Dividend

5.1 Amount

QFIN has a Yearly Dividend Yield of 3.47%.
QFIN's Dividend Yield is a higher than the industry average which is at 4.07.
QFIN's Dividend Yield is rather good when compared to the S&P500 average which is at 2.22.
Industry RankSector Rank
Dividend Yield 3.47%

5.2 History

QFIN has paid a dividend for less than 5 years, so there is no long track record yet.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0

5.3 Sustainability

DPN/A
EPS Next 2Y21.43%
EPS Next 3Y19.12%

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