Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 18 Oct, 24 | LX | Speculative Buy | USD 2.85 | USD 3.19 | USD 3.4 | Same day | 19.3% |
Data Powered by EOD Historical Data (“EODHD”).
LexinFintech Holdings Ltd., together with its subsidiaries, provides online consumer finance services in the People's Republic of China. The company offers Fenqile.com, an online consumer finance platform that offers installment purchase and personal installment loans, as well as online direct sales of electronic, home appliance, and general merchandise products with installment payment terms; and Lehua Card for scenario-based lending. It also provides technology-driven platform services for financial institution customers and partners to increase revenues, manage financial risks, improve operating efficiency and service quality, enhance collections, and reduce overall costs; Maiya, a buy-now and pay-later service; and Juzi Licai, an online investment platform. In addition, the company offers technical support and consulting, software development, financing guarantee, and financial technology services. The company was formerly known as Staging Finance Holding Ltd. and changed its name to LexinFintech Holdings Ltd. in March 2017. LexinFintech Holdings Ltd. was founded in 2013 and is headquartered in Shenzhen, the People's Republic of China.
Rising Revenue: RMB 3,640.7 mn in Q2 FY24 vs RMB 3,055.8 mn in Q2 FY23
Lower Credit Risk Exposure: Debt-Equity of 0.52x in Q2 FY24 vs Industry Median of 1.01x
Lower Cash Balance: RMB 2,094 mn in Q2 FY24 vs RMB 2,628 mn in Q2 FY23
Lower Shareholders' Wealth: ROE of 2.24% in Q2 FY24 vs Industry Median of 3.3%
Foreign Exchange Risk, Regulatory Risk, Market Competition, Technology Dependence, Management and Governance, etc.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 2.85 | 2.5 | 3.19 | 3.4 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Price Action Analysis (on the daily chart)
LX's stock price experienced a substantial rise, followed by a pullback to its breakout zone as indicated by the trendline. This suggests a strong basis for additional upward momentum in the near term. As the stock continues to rise, it is likely to face a key resistance level at USD 3.33 in the short term, potentially within the next 2-4 weeks. If the stock successfully breaches this level, it could trigger further buying momentum and potentially lead to extended gains in the stock.
Technical Indicators Analysis (On the daily chart)
On the daily chart, the 14-period RSI (Relative Strength Index) is above the midpoint at 63.50, supporting positive bias. Trading volumes appear to support this upward movement. Additionally, the stock currently trades above its 21-day and 50-day Simple Moving Averages (SMAs), which could serve as support levels in the event of any short-term price fluctuations.
As per the above-mentioned price action and technical indicators analysis, Lexinfintech Holdings Ltd (NASDAQ: LX) is is looking technically well-placed on the chart, and a ‘Speculative Buy’ recommendation has been given on the stock at USD 2.85 as on October 17, 2024.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Financial Services Industry: Credit Services
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| LX Lexinfintech Holdings Ltd |
0.06 1.02% | 5.97 | 2.33 | 1.98 | 0.02 | 0.21 | 0.07 | 0.49 |
| V Visa Inc. Class A |
-2.615 0.82% | 315.10 | 31.25 | 25.97 | 16.18 | 13.64 | 16.19 | 23.37 |
| MA Mastercard Inc |
-3.86 0.73% | 524.17 | 37.04 | 29.50 | 16.14 | 62.35 | 16.47 | 27.24 |
| AXP American Express Company |
-1.555 0.52% | 297.10 | 21.83 | 20.04 | 3.53 | 7.21 | 4.18 | |
| PYPL PayPal Holdings Inc |
-0.86 0.99% | 86.27 | 15.53 | 12.61 | 2.28 | 3.23 | 2.14 | 9.31 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from a high-risk perspective and recommendations are provided for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 17, 2024. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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