Last Updated: 13 Oct 2024
Executive Summary
Lexinfintech Holdings Ltd. (LX) is a leading online consumer finance and consumer platform in China. The company has a strong track record of growth and profitability, and is well-positioned to benefit from the continued growth of the Chinese consumer finance market. The stock is currently trading at $3.35, which is below our analyst target price of $2.62. We believe that LX is a good value at current levels and recommend investors to buy the stock.
Company Overview
Lexinfintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, China. The company provides a range of consumer finance products, including personal loans, credit cards, and installment loans. LX also operates a consumer platform that offers a variety of products and services, including e-commerce, travel, and entertainment.
Fundamental Analysis
LX has a strong track record of growth and profitability. The company's revenue has grown at a compound annual growth rate (CAGR) of 45% over the past three years. Net income has also grown at a CAGR of 40% over the same period. LX is profitable on both a GAAP and non-GAAP basis. The company's GAAP net income margin was 5.8% in 2021, and its non-GAAP net income margin was 17.5%.
LX has a strong balance sheet. The company has a low level of debt and a high level of cash and cash equivalents. LX's debt-to-equity ratio is 0.2, and its cash-to-debt ratio is 1.5.
Technical Analysis
LX's stock price has been in a downtrend since early 2022. The stock is currently trading below its 50-day and 200-day moving averages. The relative strength index (RSI) is also below 50, indicating that the stock is oversold.
Short Term Outlook
We believe that LX's stock is undervalued at current levels. The company has a strong track record of growth and profitability, and is well-positioned to benefit from the continued growth of the Chinese consumer finance market. We expect LX's stock to rebound in the short term.
Long Term Outlook
We are bullish on LX's long-term prospects. The company is a leader in the Chinese consumer finance market, and we believe that it has the potential to continue to grow its market share. We expect LX to continue to grow its revenue and earnings at a healthy pace in the coming years.
Analyst Recommendations
We recommend investors to buy LX stock. We believe that the stock is undervalued at current levels and has the potential to generate strong returns in the long term. Our analyst target price for LX is $2.62.
