Want To Invest In Qudian Inc (NYSE:QD)? Here’s How It Performed Lately
When Qudian Inc (NYSE:QD) released its most recent earnings update (31 March 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Qudian performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see QD has performed. View our latest analysis for Qudian
How QD fared against its long-term earnings performance and its industry
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to examine different stocks in a uniform manner using new information. For Qudian, its most recent trailing-twelve-month earnings is CN¥2.02B, which compared to the prior year’s figure, has escalated by a non-trivial 97.09%. Since these figures may be relatively myopic, I have calculated an annualized five-year figure for Qudian’s earnings, which stands at CN¥1.00B This suggests that, on average, Qudian has been able to consistently improve its earnings over the past few years as well.
What’s enabled this growth? Let’s take a look at whether it is only owing to industry tailwinds, or if Qudian has seen some company-specific growth. In the last couple of years, Qudian increased its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Eyeballing growth from a sector-level, the US consumer finance industry has been growing its average earnings by double-digit 13.42% in the prior year, and 13.03% over the past half a decade. This suggests that whatever uplift the industry is enjoying, Qudian is capable of amplifying this to its advantage.
What does this mean?
Qudian’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Qudian gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Qudian to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for QD’s future growth? Take a look at our free research report of analyst consensus for QD’s outlook.
Financial Health: Is QD’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
