Qfin Holdings Inc. American Depositary Shares (QFIN)

FairStock Score: 77/100 — HIGH CONVICTION

Key Financials

Strengths

• Generates $659 million in annual free cash flow (42.6% yield on market cap)
• High return on equity of 24.7% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.18, providing financial flexibility
• Revenue growth of 23.7% demonstrates strong top-line momentum
• Attractive 11.6% dividend yield providing steady income returns

Concerns

• Altman Z-Score of 0.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Qfin Holdings Inc. American Depositary Shares is a micro-cap financial services company valued at $1.5 billion. The business generates $19.2 billion in annual revenue with a 5.3% net margin and $659 million in free cash flow. From a quality standpoint, Qfin shows distressed Altman Z-Score of 0.1 warrants caution and strong 25% ROE. On valuation, the stock is deeply undervalued on a P/E basis at 2.0x, with offers a 89% margin of safety vs Graham Number of $116. Growth dynamics show revenue growing at 23.7% and profit growth of -20.4%. The 11.6% dividend yield adds an income component for patient holders. Our composite FairStock Score of 77/100 reflects strong fundamentals overall. This combination of reasonable valuation, solid returns, and conservative leverage makes it worth a closer look for value-oriented portfolios.

Bull Case

Qfin's 24% revenue growth trajectory could accelerate as it captures additional market share in the financial services sector. With $659 million in annual free cash flow (42.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the financial services space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer