U.S. Markets closed

A Holistic Look At X Financial (NYSE:XYF)

Simply Wall St

I've been keeping an eye on X Financial (NYSE:XYF) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe XYF has a lot to offer. Basically, it is a company that has been able to sustain great financial health, trading at an attractive share price. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, read the full report on X Financial here.

Undervalued with adequate balance sheet

XYF's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that XYF has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. With a debt-to-equity ratio of 10.0%, XYF’s debt level is acceptable. This indicates a good balance between taking advantage of low cost funding through debt financing, but having enough financial flexibility and headroom to grow debt in the future. XYF is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of XYF's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the consumer finance industry, XYF is also trading below its peers, relative to earnings generated. This bolsters the proposition that XYF's price is currently discounted.

NYSE:XYF Price Estimation Relative to Market, September 18th 2019

Next Steps:

For X Financial, I've compiled three key aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for XYF’s future growth? Take a look at our free research report of analyst consensus for XYF’s outlook.
  2. Historical Performance: What has XYF's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of XYF? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.