The world is progressing towards contactless payments and e-commerce. This has contributed to the extensive acquisition of fintech apps. They are digital results that modify how one handles money, makes remissions, and acquires financial services. With this conversion, fintech-as-a-service (FaaS) has surfaced, gratifying the requirements of the fiscal technology sector and free-spirited software vendors.
In addition, continuous innovation drives new products and services, meeting market demands and boosting competitiveness. These trends highlight a dynamic fintech landscape where technological progress and strategic efforts fuel global growth and shape the industry's future. The fintech market is estimated to increase at a CAGR of 28.3% by 2028.
Against this backdrop, let’s compare two fintech stocks to analyze which is more promising: FinVolution Group (FINV) and Qudian Inc. (QD).
The Case for FinVolution Group Stock
With a $1.82 billion market cap, FinVolution Group (FINV) operates in the online consumer finance industry. The company operates a fintech platform that is empowered by borrowers with financial institutions. It operates in China and internationally.
FINV’s stock has gained 35.8% over the past three months to close the last trading session at $7.13.
FINV’s 0.57x trailing-12-month asset turnover ratio is 159.3% higher than the 0.22x industry average. Also, its 9.78% trailing-12-month Return on Total Assets is 808.2% higher than the 1.08% industry average.
FINV’s net revenue for the third quarter, which ended on September 30, 2024, came in at $466.83 million. In addition, the company’s non-GAAP net income was $94.57 million, or $0.07 per share. Its non-GAAP operating income stood at $85.47 million.
For the year ending December 2024, FINV’s revenue is expected to increase 4.5% year-over-year to $1.82 billion. Its EPS for the ongoing quarter is expected to be $1.33, increasing 9% from the prior year’s period.
FINV’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Sentiment and a B for Quality, Stability, Momentum, and Value. FINV is ranked first out of 42 stocks in the A-rated China industry.
In addition to the POWR Ratings I’ve just highlighted, you can see FINV’s ratings for Growth here.
The Case for Qudian Inc. Stock
Valued at $556.84 million by market cap, Qudian Inc. (QD) operates as a consumer-oriented technology company in China. The company engages in the operation of online platforms to provide small consumer credit products. It also provides technology development and services; research and development services; and delivery services.
Shares of QD have surged 26.1% over the past nine months to close the last trading session at $3.
In terms of the trailing-12-month CAPEX/Sales, QD’s 245% is significantly higher than the 1.82% industry average. However, its 9.67% trailing-12-month gross profit margin is 83.7% lower than the 59.43% industry average.
QD’s total revenues increased 85.9% year-over-year to $55.02 million for the fiscal 2024 third quarter that ended September 30, 2024. Moreover, the company’s non-GAAP net income came in at $131.91 million and $0.73 per share.
QD’s fundamentals are reflected in its POWR Ratings. The stock has an overall C rating, translating to Neutral in our proprietary rating system.
QD has a C grade for Value and Quality. It is ranked #28 in the same industry.
Click here for the additional POWR Ratings for QD (Growth, Stability, Sentiment, and Momentum).
FinVolution (FINV) vs. Qudian (QD): Which Fintech Stock Is More Promising?
The fintech industry is poised for rapid growth, driven by technological innovation, digital transformation, and increasing consumer demand for seamless financial solutions. Advancements in AI and open banking are reshaping the sector, fostering global adoption and competition.
Leading fintech companies FINV and QD stand to capitalize on the optimistic industry outlook. However, FINV’s strong profitability might make it the better fintech stock pick.
Our research shows that the odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all the top-rated stocks in the China industry here.
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FINV shares were trading at $6.99 per share on Tuesday afternoon, down $0.14 (-1.96%). Year-to-date, FINV has gained 49.13%, versus a 28.34% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
FinVolution (FINV) vs. Qudian (QD): Which Fintech Stock Is More Promising? StockNews.com
