LX: What's Going On Next?

2023-07-10

$LexinFintech Holdings Ltd.(LX)$ Never had a losing quarter even through COVID. If earnings are merely stable in coming quarters this is effectively around 2 p/e.

FINV had great earnings and has I would guess a bit more ability to support the stock via buybacks right now. Deserves higher valuation than LX probably.

But LX so much cheaper, it might close the gap a little p/e and share price-wise between the two at some point.

What’s more, if accounting is to be believed, it has earned a little more than $5/ADS over its public life. I think most of that has been deployed to grow the business and originate more loans with less cost of funds.

With the current climate, they need to repatriate capital to the investors to reprise the equity. They did buy back 20m shares last year, which was good. They are now paying back the converts through the end of the year. If they announce a little dividend (definitely possible right now), it will immediately reprise in short order.

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enforcer
2023-07-10
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If earnings are merely stable in coming quarters this is effectively around 2 p/e. FINV had great earnings and has I would guess a bit more ability to support the stock via buybacks right now. Deserves higher valuation than LX probably. But LX so much cheaper, it might close the gap a little p/e and share price-wise between the two at some point.What’s more, if accounting is to be believed, it has earned a little more than $5/ADS over its public life. I think most of that has been deployed to grow the business and originate more loans with less cost of funds. With the current climate, they need to repatriate capital to the investors to reprise the equity. They did buy back 20m shares last year, which was good. They are now paying back the converts through the end of the year. If they announce a little dividend (definitely possible right now), it will immediately reprise in short order.<img src=\"https://community-static.tradeup.com/news/fccd8147be07faf657b41e4c4d463674\" tg-width=\"500\" tg-height=\"250\"></body></html>","htmlText":"<html><head></head><body> <a data-mention-id=\"LX\" class=\"teditor-mention\" data-mention-name=\"LexinFintech Holdings Ltd.\" href=\"https://ttm.financial/S/LX\">$LexinFintech Holdings Ltd.(LX)$</a> Never had a losing quarter even through COVID. If earnings are merely stable in coming quarters this is effectively around 2 p/e. FINV had great earnings and has I would guess a bit more ability to support the stock via buybacks right now. Deserves higher valuation than LX probably. But LX so much cheaper, it might close the gap a little p/e and share price-wise between the two at some point.What’s more, if accounting is to be believed, it has earned a little more than $5/ADS over its public life. I think most of that has been deployed to grow the business and originate more loans with less cost of funds. With the current climate, they need to repatriate capital to the investors to reprise the equity. They did buy back 20m shares last year, which was good. They are now paying back the converts through the end of the year. If they announce a little dividend (definitely possible right now), it will immediately reprise in short order.<img src=\"https://community-static.tradeup.com/news/fccd8147be07faf657b41e4c4d463674\" tg-width=\"500\" tg-height=\"250\"></body></html>","text":"$LexinFintech Holdings Ltd.(LX)$ Never had a losing quarter even through COVID. If earnings are merely stable in coming quarters this is effectively around 2 p/e. FINV had great earnings and has I would guess a bit more ability to support the stock via buybacks right now. Deserves higher valuation than LX probably. But LX so much cheaper, it might close the gap a little p/e and share price-wise between the two at some point. What’s more, if accounting is to be believed, it has earned a little more than $5/ADS over its public life. I think most of that has been deployed to grow the business and originate more loans with less cost of funds. With the current climate, they need to repatriate capital to the investors to reprise the equity. They did buy back 20m shares last year, which was good. They are now paying back the converts through the end of the year. 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