Momentum Stock Watch: Lexinfintech Holdings Ltd (LX)

Company Profile:

LexinFintech Holdings Ltd., through its subsidiaries, operates as an online consumer finance platform for young professionals in the People’s Republic of China. The company operates Fenqile.com, a retail and online consumer finance platform that offers installment purchase loans, personal installment loans, and other loan products, as well as provides online direct sales with installment payment terms; and Le Card, a membership platform, which offers savings, benefits, and membership privileges to food and beverage, apparel, hospitality, and leisure sectors. It also matches customer loans with diversified funding sources, including individual investors on its Juzi Licai online investment platform, third-party commercial banks, consumer finance companies, institutional funding partners in its direct lending programs, investors of its asset-backed securities, and other licensed financial institutions. The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People’s Republic of China.

Recent News:

The company reported total operating revenue reached RMB3.0 billion. Credit-oriented services income reached RMB2.0 billion, representing an increase of 48.8% from the second quarter of 2019. Net income was RMB419 million, representing a decrease of 33.3% from the second quarter of 2019.

With a price-to-earnings (or “P/E”) ratio of 10x LexinFintech Holdings Ltd. may be sending bullish signals at the moment, given that almost half of all companies in the United States have P/E ratios greater than 20x and even P/E’s higher than 38x are not unusual.

 

Fundamental Analysis:

Ninestocks analyzes several different financial aspects: Growth, Profitability, solvency and efficiency.

Growth – Measures the growth of both the company’s income statement and cash flow.

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Profitability – Measures the historical price movement of the stock.

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Solvency – Measures the solvency of the company based on several ratios.

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Efficiency – Measures the strength and historic growth of a company’s return on invested capital.

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Conclusion:

LX’s strengths can be seen in better growth, strong profitability, better solvency and robust efficiency compared with its peers. Its revenue and net income have increased over recent several years. Technical indicators signal the bullish signs, as there is a bullish crossover in MACD and Stochastic oscillator and the RSI stands at 46.17 with positive bias. We rate Lexinfintech Holdings Ltd (LX) a STRONG BUY.

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