LexinFintech Holdings Ltd., through its subsidiaries, operates as an online consumer finance platform for young adults in the People’s Republic of China.
The last earnings update was 7 days ago.
Discounted Cash Flow Calculation for NasdaqGM:LX using Excess Returns Model Model
The calculations below outline how an intrinsic value for LexinFintech Holdings is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.
In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.
The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
LexinFintech Holdings's share price is below the future cash flow value, and at a moderate discount (> 20%).
LexinFintech Holdings's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
LexinFintech Holdings's earnings available for a low price, and how does
this compare to other companies in the same industry?
LexinFintech Holdings's earnings are expected to grow by 17.3% yearly, however this is not considered high growth (20% yearly).
LexinFintech Holdings's revenue is expected to grow significantly at over 20% yearly.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
LexinFintech Holdings's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
3/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
LexinFintech Holdings's finances.
The net worth of a company is the difference between its assets and liabilities.
LexinFintech Holdings is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
LexinFintech Holdings's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
LexinFintech Holdings's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Low level of unsold assets.
Debt is covered by short term assets, assets are 2x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Jay Wenjie Xiao has been the Chief Executive Officer and Director of LexinFintech Holdings Ltd. since August 2013. Mr. Xiao has served as chairman of the board at LexinFintech Holdings Ltd. since December 2017. Mr. Xiao has over 10 years of experience in the online finance industry. Prior to that, Mr. Xiao served as Product Manager in the infrastructure platform department of Tenpay. Mr. Xiao received his bachelor's degree in design from Nanchang Hangkong University in 2005.
Insufficient data for Jay to compare compensation growth.
Insufficient data for Jay to establish whether their remuneration is reasonable compared to companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the LexinFintech Holdings management team is about average.
Chairman & CEO
President & Director
CFO & Director
Chief Human Resources Officer
Chief Financing Cooperation Officer
Chief Risk Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the LexinFintech Holdings board of directors is less than 3 years, this suggests a new board.
Brief Commentary On LexinFintech Holdings Ltd's (NASDAQ:LX) Fundamentals
I've been keeping an eye on LexinFintech Holdings Ltd (NASDAQ:LX) because I'm attracted to its fundamentals. … Looking at the company as a whole, as a potential stock investment, I believe LX has a lot to offer. … company with a
Every investor in LexinFintech Holdings Ltd (NASDAQ:LX) should be aware of the most powerful shareholder groups. … LexinFintech Holdings has a market capitalization of US$1.5b, so we would expect some institutional investors to have noticed the stock. … Check out our latest analysis for LexinFintech Holdings
Is It Time To Sell LexinFintech Holdings Ltd (NASDAQ:LX) Based Off Its PE Ratio?
and want to begin learning the link between LexinFintech Holdings Ltd (NASDAQ:LX)’s fundamentals and stock market performance. … LexinFintech Holdings Ltd (NASDAQ:LX) trades with a trailing P/E of 40.8x, which is higher than the industry average of 14.6x. … While this makes LX appear like a stock to avoid or sell if you own it, you might change your mind after I explain the assumptions behind the P/E ratio
What Are Analysts Saying About LexinFintech Holdings Ltd's (NASDAQ:LX) Earnings Trend?
Investors may find it useful to understand how market analysts view LexinFintech Holdings's earnings growth trajectory over the next couple of years and whether the future looks brighter. … See our latest analysis for LexinFintech Holdings Analysts' expectations for next year seems buoyant, with earnings growth more than doubling. … This means that, we can expect LexinFintech Holdings will grow its earnings by 62.18% every year for the next couple of years.
If You Bought LexinFintech Holdings Ltd (NASDAQ:LX) Today, There May Be An Upside
Looking at factors such as book values, along with the return and cost of equity, is practical for calculating LX’s intrinsic value. … The returns in excess of cost of equity is called excess returns: Excess Return Per Share = (Stable Return On Equity – Cost Of Equity) (Book Value Of Equity Per Share) = (-114.9% – 10.17%) * CN¥-8.39 = CN¥10.49 Excess Return Per Share is used to calculate the terminal value of LX, which is how much the business is expected to continue to generate over the upcoming years, in perpetuity. … This is a common component of discounted cash flow models: Terminal Value Per Share = Excess Return Per Share / (Cost of Equity – Expected Growth Rate) = CN¥10.49 / (10.17% – 2.47%) = CN¥136.15 These factors are combined to calculate the true value of LX's stock: Value Per Share = Book Value of Equity Per Share + Terminal Value Per Share = CN¥-8.39 + CN¥136.15 = $20.18 Relative to today's price of CN¥18.25, LX is , at this time, fairly priced by the market.
Did LexinFintech Holdings Ltd's (NASDAQ:LX) Recent Earnings Growth Beat The Trend?
When LexinFintech Holdings Ltd (NASDAQ:LX) released its most recent earnings update (30 September 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. … For LexinFintech Holdings, its most recent earnings is -CN¥23.9M, which compared to last year’s level, has become less negative. … Though LexinFintech Holdings's past data is helpful, it is only one aspect of my investment thesis.
LexinFintech Holdings Ltd., through its subsidiaries, operates as an online consumer finance platform for young adults in the People’s Republic of China. The company operates Fenqile, an online consumer finance platform that offers personal installment loans, installment purchase loans, and other loan products, as well as Le Card credit line. It also matches customer loans with diversified funding sources, including individual investors on its Juzi Licai online investment platform, institutional funding partners in its direct lending programs, and investors of its asset-backed securities. The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People’s Republic of China.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.