Is 360 DigiTech Inc. (QFIN) A Good Investment?

360 DigiTech Inc. (NASDAQ:QFIN) finished Wednesday with an addition of $1.09 to close at $22.09, an upside of 5.19 percent. An average of 1,422,780 shares of common stock have been traded in the last five days. There was a gain of $3.71 in the past week. The last 20 days have seen an average of 1,605,080 shares traded, while the 50-day average volume stands at 2,486,434.

QFIN stock has increased by 1.99% in the last month. The company shares reached their 1-month lowest point of $17.63 on 10/06/21. With the stock rallying to its 52-week high on 06/17/21, shares of the company touched a low of $9.67 and a high of $45.00 in 52 weeks. In spite of this, the price is down -50.91% from the 52-week high.


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Valuation Metrics

360 DigiTech Inc. (QFIN) has a trailing price-to-earnings (P/E) ratio of 4.21, which compares with the 14.40 for the broader industry and 12.72 for the sector. In the last five years, 360 DigiTech Inc.’s PE ratio has ranged between 10.16 and 2.697. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 1.39, the price-to-book (PB) ratio at 1.75.

The quick ratio of 360 DigiTech Inc. for the three months ended June 29 was 1.80, and the current ratio was 1.80, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.00 and a total debt to equity ratio of 0.03 for the quarter ending June 29. Its gross profit as reported stood at $1.83 billion compared to revenue of $2.08 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, 360 DigiTech Inc.’s return on assets was 20.60%. For the broader industry, ROE averaged 16.40 over the past year.

Earnings Surprise

The analyst consensus anticipated 360 DigiTech Inc.’s latest quarter earnings to come in at $1.17 per share, but it turned out to be $1.56, a 33.30% surprise. For the quarter, EBITDA amounted to $299.89 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at 360 DigiTech Inc. (QFIN) price momentum. RSI 9-day as of the close on 13 October was 61.12%, suggesting the stock is Neutral, with historical volatility in this time frame at 77.07%.

As of today, QFIN’s price is $21.14 +20.18% or $3.71 from its 5-day moving average. QFIN is currently trading +0.96% higher than its 20-day SMA and -18.15% lower than its 100-day SMA. However, the stock’s current price level is +5.34% above the SMA50 and +112.61% above the SMA200.

The stochastic %K and %D were 80.39% and 74.24%, respectively, and the average true range (ATR) was 1.34. With the 14-day stochastic at 92.80% and the average true range at 1.43, the RSI (14) stands at 55.12%. The stock has reached 1.39 on the 9-day MACD Oscillator while the 14-day reading was at 1.27.

Analyst Ratings

Jefferies launched coverage on 360 DigiTech Inc. (NASDAQ: QFIN) in its analyst report released on January 05, 2021. The firm assigned the stock a a Buy rating.The consensus rating for 360 DigiTech Inc. (QFIN) among analysts is Buy. According to current brokerage recommendations, 0 brokerage firms advise that investors sell QFIN, while 0 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 0 analysts, while 9 others rate it as a “buy”.

What is QFIN’s price target for the next 12 months?

Analysts predict a range of price targets between $162.44 and $348.96, with a median target of $195.07. Taking a look at these predictions, the average price target given by analysts for 360 DigiTech Inc. (QFIN) stock is $226.45.

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