Qudian $QD is a very interesting stock down 95% from all time high. Is it a value stock? What is its intrinsic value?
As expected during the last earnings of Qudian, revenues and earnings are falling. We can expect them to keep falling. However, at the current price, I believe that Qudian is still a good investment as it is massively undervalued.
What's happening to Qudian? Because of increasing regulations in China, Qudian has to be more choosy and lower their number of borrowers. This results to lower revenues and profits.
However, this is also lowering the delinquency rate of Qudian, keeping their profit margins high. If we look at the FCF that Qudian can generate in the coming years, even disounting them at 20%, Qudian is worth more than the current $400 million valuation. Looking at the book value of Qudian alone, it has a PB ratio of 0.2, and if in the future Qudian is valued as a financial company, we can expect the exit multiples on Qudian to increase.
Qudian remains a very volatile stock but having a small portion in one's portfolio in it, in my opinion, is worth the risk as the potential reward is big if we're looking at the long-term.
Full analysis of Qudian: