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Hexindai Inc. (NASDAQ:HX) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of HX, it is a financially-healthy company with a excellent future outlook, not yet reflected in the share price. Below is a brief commentary on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Hexindai here.
Exceptional growth potential and good value
One reason why investors are attracted to HX is its notable earnings growth potential in the near future of 86%. Earnings growth is paired with an eye-catching top-line trajectory also doubling over the same period, which indicates a high-quality bottom-line expansion, as opposed to those driven by unsustainable cost-cutting activities. HX's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Also, relative to the rest of HX's peers, it is also trading at a value below those of similar sizes in asset terms. This supports the theory that HX is potentially underpriced.
HX's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that HX manages its cash and cost levels well, which is a crucial insight into the health of the company. HX appears to have made good use of debt, producing operating cash levels of 4.39x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.
For Hexindai, I've put together three pertinent factors you should further research:
- Historical Performance: What has HX'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.
- Dividend Income vs Capital Gains: Does HX return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from HX as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HX? 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 firstname.lastname@example.org. 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.