HTT

We rate Qudian Inc. (HTT) as Avoid with a composite score of 32.0/100 at a current price of $2.78. The stock falls in the bottom quintile of our universe across key quantitative factors, and the multi-factor weakness suggests a high probability of continued underperformance.

The rating is primarily driven by strength in investment (54th percentile) and stability (32th percentile), which together account for the majority of the composite score. Offsetting weakness in value (11th percentile) and momentum (19th percentile) tempers our overall conviction. We assign a No Moat rating (29/100), Medium uncertainty, and Standard capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs; sustainability of the current growth rate; valuation compression risk if growth disappoints. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Qudian Inc. holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 32.0/100 places it at rank #4374 in our full 7,333-stock universe. At $566M in market capitalization, Qudian Inc. is a small-cap player in the Finance, Insurance, And Real Estate space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 67%, though momentum at the 19th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 7% (-69.4pp vs sector) narrow to operating margins of -142% (-159.4pp vs sector) and net margins of 42.4%, yielding a gross-to-net conversion rate of 595%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $2.78, Qudian Inc. is trading at a premium to fundamental value. Our value factor score of 11/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The premium valuation implies the market is pricing in significant future growth or quality improvements that are not yet fully reflected in current fundamentals.

The stock currently trades at a P/E of 140.6x (a 1079% premium to the sector median of 11.9x), P/B of 0.3x, P/S of 3.9x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Medium uncertainty rating to Qudian Inc.. The stock presents a balanced risk profile: below-average price stability (32th percentile) and weak quality scores (24th percentile). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: below-average price stability (32th percentile); weak quality scores (24th percentile); elevated valuation multiple (P/E 140.6x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 32th percentile and quality factor at the 24th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (6% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate Qudian Inc.'s capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 3.3%, and the balance sheet is managed within acceptable parameters (D/E: 6%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Qudian Inc. falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, Qudian Inc. receives a Avoid rating with a composite score of 32.0/100 (rank #4374 of 7,333). Our quantitative framework assigns a No Moat (29/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 28/100.

Our analysis does not support a constructive view on Qudian Inc. at this time. The combination of limited competitive advantages, medium uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.