QFIN Gains 117% in a Year and Outpaces Industry: Time to Buy the Stock?

Qifu Technology, Inc. QFIN stock has shown astounding growth over the past year. The stock has skyrocketed 117%, outperforming the 52.8% growth of the industry and the 12.3% rise of the Zacks S&P 500 composite.

1-Year Price Performance

QFIN’s performance is significantly higher than that of its competitors, Priority Technology PRTH and Acuity AYI. PRTH and AYI have gained 90.8% and 6.9% in the same period, respectively.

Qifu Technology has outperformed Priority Technology, Acuityand the industry as a whole in the past six months. QFIN has gained 11.6%, surpassing its industry’s marginal growth. Priority Technologyand Acuityhave decreased 10% and 15.23%, respectively.

Investors might be swift at buying the stock, looking at how appealing the past year and the past six months' performance are. Hence, we have analyzed the stock to conclude whether initiating a “Buy” is the best move.

QFIN Leverages AI to Fuel User and Volume Growth

Qifu Technology’s operations are laced with AI, driving user acquisition and volume growth. In the fourth quarter of 2024, the management stated that 74% of the graphics and 27% of the videos deployed by the company are generated by AI-generated content technology. This strategy benefited it by lowering the average cost per credit line user by 10%. Also, QFIN improved its ROI by 9%, facilitated by automated ad placements.

QFIN’s marketing-focused AI agent utilizes multimodal technology to evaluate user intent in real-time, integrate campaign management across multiple channels and enable real-time changes in strategy. This contributed to a significant enhancement in the company’s user profiling accuracy across channels, with a surge in the conversion rate of new credit line users to new borrowers by 33% year over year in the first quarter of 2025.

Furthermore, the company’s AI-Plus credit strategy, launched in early 2025, focuses on building an AI agent platform to boost core credit processes. In addition to that, QFIN’s intelligence credit engine (ICE), an AI-led platform, is instrumental to its financial performance. ICE analyzes borrower profiles and clusters them with financial institutions, with 49.3% of total loan facilitation flowing via ICE.

QFIN’s Cash Reserves High, Current Debt Low

Qifu Technology’s strong cash reserves of $1.9 billion at the end of the first quarter of 2025, with $168 million as current debt, demonstrate its robust liquidity position. QFIN’s current ratio of 3.08 exceeds the industry average of 1.84, hinting at its ability to effectively meet short-term obligations. Also, investors are reassured by its improvement over the preceding quarter’s 2.45 and the year-ago quarter’s 2.12.

Qifu Technology’s Discounted Valuation

QFIN stock looks cheap and appealing to investors. It is priced at 5.6 times forward 12-month earnings per share, which is significantly lower than the industry’s average of 24.3 times. When looking at the trailing 12-month EV-to-EBITDA ratio, Qifu Technology is trading at 4 times, far below the industry’s average of 30.8 times.

QFIN’s Bright Top & Bottom-Line Outlook

The Zacks Consensus Estimate for the company’s 2025 revenues is pegged at $2.6 billion, indicating 7.6% growth from the year-ago reported level. For 2026, the top line is pegged at $2.7 billion, indicating a 5.5% year-over-year increase.

The consensus estimate for 2025 earnings is pegged at $7.09 per share, indicating a 25.3% increase from the prior year's actual. For 2026, the bottom line is pinned at $7.94 per share, implying a 12% year-over-year rise.

Verdict: Buy Qifu Technology Now

QFIN is no short of incorporating AI in its operations. In doing so, the company has achieved tremendous improvement across user acquisition and volume growth. In addition to that, it maintains a strong balance sheet position with high cash reserves and low current debt, signaling a robust liquidity position. Investors might be enticed by the fact that this fundamentally strong stock possesses a discounted valuation.

Banking on these factors, we are positive about the stock’s future growth. Hence, we recommend investors to add QFIN shares to their portfolios.

QFIN currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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