Is Yintech Investment Holdings Limited (NASDAQ:YIN) Undervalued After Accounting For Its Future Growth?

Yintech Investment Holdings Limited (NASDAQ:YIN) is considered a high growth stock. However its last closing price of $9.18 left investors wondering whether this growth has already been factored into the share price. Let’s take a look at some key metrics to determine whether there's any value here for current and potential future investors. View our latest analysis for Yintech Investment Holdings

Should you get excited about YIN's future?

Yintech Investment Holdings's growth potential is very attractive. Analyst consensus expectation is extremely bullish with earnings forecasted to rise significantly from today's level of CN¥6.874 to CN¥12.121 over the next three years. On average, this leads to a growth rate of 25.72% each year, which illustrates a highly optimistic outlook in the near term.

Is YIN available at a good price after accounting for its growth?

Stocks like Yintech Investment Holdings, with a price-to-earnings (P/E) ratio of 8.41x, always catch the eye of investors on the hunt for a bargain. In isolation, this metric can be a bit too simplistic but in comparison to benchmarks, it tells us that YIN is undervalued relative to the current US market average of 18.3x , and undervalued based on its latest annual earnings update compared to the capital markets average of 16.69x .

We already know that YIN appears to be undervalued based on its PE ratio, compared to the industry average. But, to be able to properly assess the value of a high-growth stock such as Yintech Investment Holdings, we must incorporate its earnings growth in our valuation. The PEG ratio is a great calculation to take account of growth in the stock's valuation. A PE ratio of 8.41x and expected year-on-year earnings growth of 25.72% give Yintech Investment Holdings an extremely low PEG ratio of 0.33x. This tells us that when we include its growth in our analysis Yintech Investment Holdings's stock can be considered relatively cheap , based on its fundamentals.

What this means for you:

YIN's current undervaluation could signal a potential buying opportunity to increase your exposure to the stock, or it you're a potential investor, now may be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:

1. Financial Health: Is YIN’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.
2. Valuation: What is YIN worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether YIN is currently mispriced by the market.
3. 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.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.