Qifu Technology Stock Soars 104% in 6 Months: Should You Buy It?

Core Viewpoint - Qifu Technology, Inc. (QFIN) has demonstrated exceptional stock performance, significantly outperforming its industry and competitors, driven by strong financial metrics and favorable economic conditions [1][12][18]. Group 1: Stock Performance - QFIN stock has surged 104.4% over the past six months, compared to a 50.5% increase in the industry and 11.4% growth in the Zacks S&P 500 composite [1]. - As of the last trading session, QFIN closed at $38.3, which is 5.2$40.3, and is trading above its 50-day moving average, indicating bullish investor sentiment [4][5]. Group 2: Financial Metrics - QFIN's D1 delinquency rate has decreased over the last three quarters, with rates of 4.9%, 4.8%, and 4.6% for the first, second, and third quarters of 2024, respectively, while the 30-day collection rate improved from 85.1% to 87.4% during the same period [8]. - The 90-day default rate improved from 3.4% in Q2 2024 to 2.7% in Q3 2024, and funding costs were reduced by 30 basis points per quarter, indicating effective risk management and collection practices [9]. - QFIN's stock is priced at 6.3 times forward 12-month earnings per share, significantly lower than the industry average of 41.7 times, and its trailing 12-month EV-to-EBITDA ratio is 4.9 times, compared to the industry's average of 89.1 times [12]. - The return on equity (ROE) for QFIN is 24.4%, well above the industry average of 3.4%, reflecting strong profitability [13]. - QFIN has a current ratio of 2.56, surpassing the industry average of 2.16, indicating a strong liquidity position [14]. Group 3: Revenue and Earnings Outlook - The Zacks Consensus Estimate for QFIN's 2024 revenues is $2.3 billion, reflecting a 1.8$2.4 billion for 2025, indicating a 3.7% year-over-year growth [16]. - The consensus estimate for 2024 earnings is $5.7 per share, suggesting a 55.2$6.4 per share for 2025, indicating a 12% year-over-year rise [16]. Group 4: Economic Environment - The People's Bank of China (PBOC) has implemented measures to lower the reverse repurchase rate and reduce the Required Reserve Ratio (RRR), which enhances liquidity in the banking system and lowers lending costs, potentially increasing demand for QFIN's lending services [10][11].