Qfin (NASDAQ:QFIN) Releases Quarterly Earnings Results, Misses Estimates By $0.48 EPS

Qfin (NASDAQ:QFIN) announced its quarterly earnings results on Tuesday. The company reported $0.48 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.96 by ($0.48), Zacks reports. Qfin had a net margin of 27.48% and a return on equity of 20.85%. The business had revenue of $524.96 million for the quarter, compared to the consensus estimate of $562.45 million.

Here are the key takeaways from Qfin’s conference call:

• Q2 revenue fell to RMB 3.57 billion from RMB 3.91 billion in Q1 and RMB 5.22 billion a year earlier, while non-GAAP net profit declined to RMB 455 million. Results were pressured by lower loan volume and pricing, deleveraging, and a one-off tax expense of approximately RMB 500 million.
• Industry liquidity tightened sharply following a late-June peer event and stricter regulation, prompting Qfin to reduce originations and tighten underwriting. Management expects loan volume to remain below Q2 levels for the foreseeable future, with risk-bearing loan C-M2 potentially rising about 25% sequentially in August and taking two to three quarters to normalize.
• Collection capacity shortages caused by a nationwide regulatory campaign are weighing on recovery efficiency, while external funding costs increased about 25 basis points in July and August. Management expects funding costs to rise further in the second half and issued Q3 non-GAAP net income guidance of only RMB 400 million to RMB 500 million, down 67% to 73% year over year.
• Despite the downturn, Qfin reported improving Q2 credit metrics, including a C-M2 ratio of 0.66% and an 88.1% 30-day collection rate, while reducing acquisition spending and weaker API exposure. Its technology-solutions business also expanded rapidly, with enabled loan volume up approximately 515% year over year to RMB 10.5 billion, supported by new AI projects with banks.

Qfin Trading Up 4.9%

QFIN stock opened at $11.53 on Wednesday. The firm has a fifty day moving average price of $13.65 and a 200 day moving average price of $13.93. Qfin has a fifty-two week low of $10.85 and a fifty-two week high of $32.69. The company has a debt-to-equity ratio of 0.03, a quick ratio of 2.22 and a current ratio of 2.22. The firm has a market cap of $1.40 billion, a PE ratio of 2.11 and a beta of 0.63.

Wall Street Analysts Forecast Growth

Several research firms recently weighed in on QFIN. Deutsche Bank Aktiengesellschaft set a $13.00 target price on Qfin in a research report on Wednesday, August 12th. Zacks Research raised Qfin from a “strong sell” rating to a “hold” rating in a research note on Monday, July 13th. Bank of America reaffirmed a “neutral” rating and set a $15.33 price objective on shares of Qfin in a research report on Wednesday, May 27th. JPMorgan Chase & Co. cut their price objective on Qfin from $14.50 to $13.50 and set a “neutral” rating for the company in a research note on Tuesday, August 11th. Finally, Weiss Ratings lowered shares of Qfin from a “hold (c-)” rating to a “sell (d+)” rating in a report on Monday, July 13th. One analyst has rated the stock with a Buy rating, four have assigned a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Hold” and a consensus price target of $16.31.

Insider Transactions at Qfin

In other Qfin news, Director Xiaohuan Chen acquired 4,000 shares of the stock in a transaction on Tuesday, June 9th. The stock was acquired at an average price of $14.41 per share, for a total transaction of $57,640.00. Following the completion of the transaction, the director directly owned 19,000 shares of the company’s stock, valued at $273,790. This trade represents a 26.67% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. 17.10% of the stock is currently owned by insiders.

Institutional Trading of Qfin

Several institutional investors have recently added to or reduced their stakes in QFIN. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. bought a new position in shares of Qfin during the first quarter valued at approximately $29,000. Caitong International Asset Management Co. Ltd increased its stake in Qfin by 415.9% in the fourth quarter. Caitong International Asset Management Co. Ltd now owns 2,636 shares of the company’s stock worth $51,000 after purchasing an additional 2,125 shares during the period. Parallel Advisors LLC lifted its position in shares of Qfin by 24.1% during the fourth quarter. Parallel Advisors LLC now owns 3,373 shares of the company’s stock worth $65,000 after purchasing an additional 656 shares during the last quarter. PNC Financial Services Group Inc. boosted its stake in shares of Qfin by 23.4% during the fourth quarter. PNC Financial Services Group Inc. now owns 5,358 shares of the company’s stock valued at $103,000 after purchasing an additional 1,016 shares during the period. Finally, Daiwa Securities Group Inc. boosted its stake in shares of Qfin by 14.3% during the fourth quarter. Daiwa Securities Group Inc. now owns 5,600 shares of the company’s stock valued at $108,000 after purchasing an additional 700 shares during the period. Institutional investors own 74.81% of the company’s stock.

About Qfin

360 DigiTech, Inc (NASDAQ: QFIN) is a China‐based fintech company that specializes in providing digital lending solutions to underserved consumer and small business markets. Leveraging proprietary credit assessment technologies and big data analytics, the company connects borrowers with a network of financial institutions and investors through its online platform. Its services encompass unsecured consumer loans, installment credit products, and working capital financing for micro and small enterprises.

The company’s flagship platform offers an end‐to‐end digital lending experience, from application and credit evaluation to disbursement and repayment.