Critical Contrast: LexinFintech (LX) vs. The Competition

LexinFintech (NASDAQ:LX) is one of 120 public companies in the “Consumer Finance” industry, but how does it weigh in compared to its peers? We will compare LexinFintech to similar companies based on the strength of its institutional ownership, risk, profitability, valuation, analyst recommendations, earnings and dividends.

Dividends

LexinFintech pays an annual dividend of $0.30 per share and has a dividend yield of 47.3%. LexinFintech pays out 35.7% of its earnings in the form of a dividend. As a group, “Consumer Finance” companies pay a dividend yield of 6.1% and pay out 34.6% of their earnings in the form of a dividend.

Earnings and Valuation

This table compares LexinFintech and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
LexinFintech	$1.88 billion	$239.82 million	0.76
LexinFintech Competitors	$4.13 billion	$385.17 million	4.58

LexinFintech’s peers have higher revenue and earnings than LexinFintech. LexinFintech is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for LexinFintech and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LexinFintech	1	2	0	0	1.67
LexinFintech Competitors	895	3363	5295	276	2.50

LexinFintech presently has a consensus price target of $2.35, indicating a potential upside of 270.25%. As a group, “Consumer Finance” companies have a potential upside of 20.05%. Given LexinFintech’s higher possible upside, analysts plainly believe LexinFintech is more favorable than its peers.

Institutional & Insider Ownership

45.7% of shares of all “Consumer Finance” companies are owned by institutional investors. 27.8% of LexinFintech shares are owned by insiders. Comparatively, 22.0% of shares of all “Consumer Finance” companies are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

LexinFintech has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500. Comparatively, LexinFintech’s peers have a beta of 1.26, indicating that their average share price is 26% more volatile than the S&P 500.

Profitability

This table compares LexinFintech and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LexinFintech	7.94%	8.59%	4.50%
LexinFintech Competitors	10.48%	-15.61%	2.01%

Summary

LexinFintech peers beat LexinFintech on 10 of the 15 factors compared.

LexinFintech Company Profile

LexinFintech Holdings Ltd. (NASDAQ: LX) is a China-based fintech company that provides technology-enabled consumer finance services. The company focuses on helping young and emerging consumers access installment payment and credit products through digital platforms. Lexin operates Fenqile, an online consumer platform that offers installment purchasing and related financial services. Its business also includes facilitating consumer loans and providing technology, risk-management, and related services to support credit origination and repayment.