Direct Finance (DIFI) AI Stock Analysis

• Market Cap: 1.34B
• Dividend Yield: 5.51%
• Average Volume (3M): 3.61K
• Price to Earnings (P/E): 12.7
• Beta (1Y): 1.10
• Revenue Growth: 6.88%
• EPS Growth: -13.14%
• Country: IL
• Employees: 758
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 542.10
• Shares Outstanding: 2,957,340
• 10 Day Avg. Volume: 3,508
• 30 Day Avg. Volume: 3,607
• 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: 54,410.00
• Price Target Upside: 18.54% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 64 Neutral
• Price Target: 54,410.00 ▲(18.54% Upside)

Direct Finance's overall stock score is driven by its strong financial performance, particularly in revenue growth and profitability. However, the high leverage and negative cash flows are significant risks. The technical analysis indicates a bearish trend, while the valuation is attractive with a reasonable P/E ratio and high dividend yield.

Direct Finance Business Overview & Revenue Model

Company Description

Direct Finance (DIFI) is a financial services company specializing in providing a wide range of lending solutions, including personal loans, business loans, and mortgage financing. Operating in the fintech sector, DIFI leverages advanced technology to offer seamless, user-friendly platforms that facilitate quick and easy access to credit for individuals and small to medium-sized enterprises (SMEs). The company's core services are designed to address diverse financial needs, ensuring customers receive personalized financial solutions with competitive rates and flexible terms.

How the Company Makes Money

DIFI makes money primarily through the interest charged on the loans it issues. The company's revenue model is based on earning interest income from the various types of loans it provides, which include personal loans, business loans, and mortgage financing. DIFI sets competitive interest rates that vary depending on the type of loan, the amount borrowed, and the borrower's creditworthiness. Additionally, the company may generate revenue from service fees associated with loan origination, processing, and account maintenance. Significant partnerships with banks and financial institutions allow DIFI to offer a diverse range of financial products and leverage additional funding sources, enhancing its ability to serve a broad customer base and contribute to its earnings.

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	1.47B	1.51B	761.64M	1.37B	844.47M	477.57M
Gross Profit	682.71M	688.46M	684.76M	725.82M	491.44M	299.01M
EBITDA	225.35M	279.15M	252.92M	425.80M	321.15M	136.17M
Net Income	103.28M	141.10M	132.47M	244.46M	181.32M	70.93M
Balance Sheet
Total Assets	9.16B	8.57B	7.83B	6.74B	4.26B	3.68B
Cash, Cash Equivalents and Short-Term Investments	11.92M	13.93M	12.58M	10.56M	80.20M	3.11M
Total Debt	7.49B	6.82B	6.24B	5.21B	3.03B	2.77B
Total Liabilities	7.78B	7.19B	6.56B	5.56B	3.31B	3.00B
Stockholders Equity	1.32B	1.32B	1.24B	1.18B	956.01M	679.14M
Cash Flow
Free Cash Flow	-460.38M	-622.12M	-928.26M	-1.10B	-1.53B	-310.42M
Operating Cash Flow	-405.89M	-576.45M	-872.07M	-1.05B	-1.51B	-293.10M
Investing Cash Flow	-57.95M	-46.59M	-56.30M	-62.00M	-24.91M	-17.06M
Financing Cash Flow	463.23M	624.39M	932.25M	1.04B	1.61B	306.21M

Direct Finance Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 45900.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:DIFI, the sentiment is Negative. The current price of 45900 is below the 20-day moving average (MA) of 48863.93, below the 50-day MA of 51010.96, and below the 200-day MA of 54794.84, indicating a bearish trend. The MACD of -1226.84 indicates Positive momentum. The RSI at 36.40 is Neutral, neither overbought nor oversold. The STOCH value of 17.91 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	784.48M	9.79	0.00%	―	0.00%	0.00%
PEN	73 Outperform	656.59M	9.92	0.00%	6.14%	27.66%	46.91%
MNIF	70 Outperform	1.16B	6.89	27.01%	4.58%	24.31%	21.51%
NAWI	66 Neutral	1.57B	9.59	17.20%	6.83%	0.00%	0.00%
DIFI	64 Neutral	1.34B	12.71		5.51%	6.88%	-13.14%
MCLL	61 Neutral	565.39M	11.55	16.66%	1.73%	0.00%	0.00%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%