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Should You Be Holding Qudian Inc. (NYSE:QD)?

Simply Wall St

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Attractive stocks have exceptional fundamentals. In the case of Qudian Inc. (NYSE:QD), there's is a financially-robust company with a a excellent growth outlook, not yet factored into the price. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Qudian here.

Very undervalued with excellent balance sheet

QD's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of QD's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the consumer finance industry, QD is also trading below its peers, relative to earnings generated. This bolsters the proposition that QD's price is currently discounted.

NYSE:QD Past and Future Earnings, May 10th 2019

QD is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that QD manages its cash and cost levels well, which is a key determinant of the company’s health. QD's has produced operating cash levels of 0.78x total debt over the past year, which implies that QD's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

NYSE:QD Historical Debt, May 10th 2019

Next Steps:

For Qudian, I've put together three relevant factors you should further examine:

  1. Historical Performance: What has QD'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.
  2. Dividend Income vs Capital Gains: Does QD 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 QD as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of QD? 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 editorial-team@simplywallst.com. 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.