Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of X Financial Are Surging Heading Into the Weekend

By Bram Berkowitz - Jun 25, 2021 at 11:51AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company has been on a huge bull run the past six months, and today looks to be a continuation.

What happened

Shares of the Chinese online personal lender X Financial (XYF 3.82%) had surged nearly 27% as of 11 a.m. EDT on Friday for no apparent reason, and leads financial gainers so far today.

So what

Shares of X Financial have been surging all year, up more than 600% in the last six months, 168% in the last month, and more than 40% over the last five days. So today appears to be just another continuation of the bull run.

The company only recently reported its first-quarter earnings results, which showed promise. Net revenue for the quarter was the equivalent of more than $138 million, up 71% from a year ago. Net income totaled more than $29 million, up from a loss of more than $30 million in the first quarter of 2020.

Red line with arrow moving upward.

Image source: Getty Images.

CEO Justin Tang issued a statement saying:

Moving forward, market demand for our products and services continues to grow and we expect to maintain our current growth momentum throughout the year. China's consumer financing and micro- and small-businesses financing markets have great potential. We believe we are well positioned to capture opportunities ahead with our trusted brand, full regulatory compliance, and our deepening cooperation with financial institutions.

Now what

Credit quality looks a lot better than this time last year, as China continues to recover from the pandemic. X Financial's guidance for the second quarter also looks better than what it just reported in the first, with the company projecting net income to be no less than $34 million, so the company looks to be on the upswing.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

X Financial Stock Quote
X Financial
$2.99 (3.82%) $0.11

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/08/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.