Yiren Digital (YRD) AI Stock Analysis

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Yiren Digital

(NYSE:YRD)

84Outperform

Yiren Digital's overall score reflects its strong financial performance and attractive valuation, which are its primary strengths. The mixed earnings call and technical indicators suggest caution, but the company's robust balance sheet and low valuation make it a compelling investment opportunity. Investors should be aware of the challenges in the insurance segment and high customer acquisition costs.

Yiren Digital (YRD) vs. S&P 500 (SPY)

Market Cap

$504.03M

Dividend Yield3.38%

Average Volume (3M)211.21K

Price to Earnings (P/E)2.3

Beta (1Y)0.47

Revenue Growth17.07%

EPS Growth-8.81%

CountryUS

Employees754

SectorFinancial

Sector Strength83

IndustryFinancial - Credit Services

Share Statistics

EPS (TTM)2.51

Shares Outstanding86,934,540

10 Day Avg. Volume211,000

30 Day Avg. Volume211,211

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)3.44

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Yiren Digital Business Overview & Revenue Model

Company DescriptionYiren Digital (YRD) is a leading Chinese fintech company that provides personal financial services through an online marketplace. The company operates primarily in the areas of online consumer finance and wealth management. Yiren Digital leverages advanced data analytics and technology to offer personalized financial solutions, including loan facilitation and investment advisory services, aiming to improve financial accessibility for underserved communities in China.

How the Company Makes MoneyYiren Digital generates revenue through its consumer finance platform, which primarily involves facilitating loans between borrowers and investors. The company earns money by charging service fees on the loans it processes, which include origination fees from borrowers and service fees from investors. Additionally, Yiren Digital offers wealth management services, generating revenue from advisory fees and management fees on the investment products it provides. The company's partnerships with financial institutions and technology providers also play a significant role in enhancing its service offerings and expanding its market reach, thereby contributing to its revenue growth.

Yiren Digital Financial Statement Overview

Summary

Yiren Digital shows strong financial health with robust revenue and profit growth, a solid balance sheet with low leverage, and excellent cash flow management. The company's financials are indicative of strong operational efficiency and financial stability.

Income Statement

Very Positive

Yiren Digital has shown robust growth in revenue and profitability over the years. The gross profit margin has been consistently strong, reaching approximately 80% in the latest annual report. The net profit margin has improved significantly, moving from a loss in 2020 to a notable profit margin of around 42.5% in 2023. Revenue growth is impressive, with a significant increase of approximately 42.5% from 2022 to 2023. EBIT and EBITDA margins are also strong, indicating efficient operational management.

Balance Sheet

Very Positive

The company maintains a solid balance sheet with a strong equity position. The debt-to-equity ratio is exceptionally low, reflecting minimal leverage and financial risk. The return on equity (ROE) is robust at approximately 25.7% for 2023, highlighting effective use of shareholder funds. Additionally, the equity ratio is strong at around 78.7%, indicating a stable financial structure with significant asset financing through equity.

Cash Flow

Very Positive

Yiren Digital demonstrates strong cash flow management, with a substantial increase in free cash flow in the latest year. The operating cash flow to net income ratio is healthy, suggesting good cash generation from operations. The free cash flow to net income ratio is also strong, indicating efficient conversion of earnings into free cash flow. The company has shown consistent growth in free cash flow over the past years.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
5.63B	4.90B	3.43B	4.48B	3.96B	8.62B
	Gross Profit
4.76B	3.92B	2.66B	3.72B	2.86B	7.95B
	EBIT
1.98B	2.59B	1.47B	1.15B	278.38M	733.42M
	EBITDA
2.32B	2.60B	1.50B	1.33B	277.46M	1.25B
	Net Income Common Stockholders
1.82B	2.08B	1.19B	1.03B	-692.75M	1.16B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.38M	6.20B	5.24B	3.04B	2.65B	3.66B
	Total Assets
402.12M	10.28B	8.54B	7.74B	6.70B	9.76B
	Total Debt
0.00	23.65M	803.13M	1.10B	81.85M	282.33M
	Net Debt
-1.38M	-5.77B	-3.47B	-1.76B	-2.39B	-2.92B
	Total Liabilities
178.73M	2.19B	2.51B	2.92B	2.92B	5.27B
	Stockholders Equity
223.39M	8.09B	6.03B	4.82B	3.78B	4.49B
Cash Flow		Free Cash Flow
1.00B	2.17B	1.85B	148.79M	268.31M	226.16M
	Operating Cash Flow
1.00B	2.17B	1.85B	158.19M	282.03M	274.17M
	Investing Cash Flow
-1.22B	100.05M	52.56M	-346.51M	-1.80B	1.11B
	Financing Cash Flow
-140.66M	-569.28M	-489.12M	427.45M	955.45M	-1.15B

Yiren Digital Technical Analysis

Technical Analysis Sentiment

Negative

Last Price5.77

Price Trends

50DMA

6.70

Negative

100DMA

5.85

Negative

200DMA

5.46

Positive

Market Momentum

MACD

-0.36

Positive

RSI

41.86

Neutral

STOCH

30.54

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YRD, the sentiment is Negative. The current price of 5.77 is below the 20-day moving average (MA) of 6.66, below the 50-day MA of 6.70, and above the 200-day MA of 5.46, indicating a neutral trend. The MACD of -0.36 indicates Positive momentum. The RSI at 41.86 is Neutral, neither overbought nor oversold. The STOCH value of 30.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for YRD.

Yiren Digital Risk Analysis

Yiren Digital disclosed 99 risk factors in its most recent earnings report. Yiren Digital reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Yiren Digital Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YRD	84 Outperform	$504.03M	2.29	17.96%	3.38%	17.07%	-8.81%
QFIN	84 Outperform	$4.90B	6.34	27.18%	3.19%	3.88%	56.29%
FINV	77 Outperform	$1.99B	6.10	16.47%	3.09%	2.51%	7.06%
LX	77 Outperform	$1.19B	8.02	10.77%	1.82%	10.06%	0.04%
JFIN	74 Outperform	$535.10M	3.65	38.42%	8.67%	19.46%	-22.51%
TIGR	71 Outperform	$1.11B	19.84	10.62%	―	43.68%	77.18%
Sector *	63 Neutral	$13.51B	9.48	9.36%	4.87%	16.09%	-8.30%

* Financial Sector Average

Performance Comparison

YRD

Yiren Digital

5.77

1.13

24.35%

FINV

FinVolution Group

7.96

3.25

69.00%

Lexinfintech Holdings

7.22

5.69

371.90%

QFIN

Qifu Technology

38.63

21.12

120.62%

TIGR

Up Fintech Holding

7.07

3.93

125.16%

JFIN

Jiayin Group

11.40

5.51

93.55%

Yiren Digital Earnings Call Summary

Earnings Call Date: Mar 20, 2025 | % Change Since: -32.98% | Next Earnings Date: Jun 5, 2025

Earnings Call Sentiment Neutral

Yiren Digital's earnings call highlighted notable achievements in customer segment upgrades, AI integration, and international business profitability, alongside significant financial services growth. However, challenges were noted in the insurance segment, with declines in premiums and increased receivables allowances. Despite higher expenses impacting net income, the overall sentiment reflects a strategic focus on long-term growth and profitability.

Highlights

Customer Segment Reshape and Upgrade

Yiren Digital reshaped and upgraded customer segments in the Financial Services business, resulting in improved asset quality and paving the way for sustainable development.

AI Integration and Efficiency Improvements

Integrated proprietary AI systems into operations, achieving significant improvements in operational efficiency and user experience, with 81% of day-one overdue cases handled by AI robots.

International Business Profitability

International Business achieved profitability by upgrading the customer mix and targeting higher-quality borrowers, especially in the Philippines.

Financial Services Growth

Total loan volumes in Q4 2024 reached RMB15.4 billion, a 32% year-over-year increase, with an impressive 49% increase for the full year 2024 compared to 2023.

AI-Driven Cost Savings

AI-powered systems led to labor cost savings of RMB1.9 million in Q4 2024 and approximately RMB9 million for the year, with additional savings of RMB44 million from enhanced funding allocation efficiency.

Insurance Brokerage Digitization

The Insurance Brokerage segment adopted a digitization model, enhancing client acquisition through social media and achieving high renewal rates for Life Insurance products.

Cash Dividend Announcement

Announced a cash dividend of US$0.22 per ADS for the second half of 2024, with distribution expected on May 15, 2025.

Lowlights

Insurance Segment Decline

Insurance premiums in 2024 totaled RMB4.4 billion, down 10% year-over-year, with a significant drop in life insurance sales due to industry-wide regulatory impacts.

Consumption and Lifestyle Revenue Drop

Strategic scaling back of product offerings led to a 25% year-over-year drop in revenue for the Consumption and Lifestyle segment in Q4 2024.

Increased Allowance for Receivables

Allowance for contract assets and receivables in Q4 2024 was RMB203 million, up 103% year-over-year, reflecting a prudent response to market conditions.

Reduced Net Income

Net income for Q4 2024 was RMB331 million, a 42% year-over-year decrease. Total net income for 2024 was RMB1,582 million, down 24% compared to the previous year.

Higher Marketing and R&D Expenses

Sales and marketing expenses increased by 45% year-over-year in Q4 2024, and R&D expenses increased by 246% year-over-year, driven by investments in AI and customer acquisition.

Company Guidance

During Yiren Digital's fourth-quarter and fiscal year 2024 earnings call, the company provided guidance on several key metrics reflecting its strong performance and future outlook. Total loan volumes in the fourth quarter reached RMB15.4 billion, a 32% increase year-over-year, contributing to a full-year total of RMB53.6 billion, up 49% from the previous year. The financial services business saw significant improvements in asset quality, with the average first payment default rate dropping by 13 basis points compared to 2023. The delinquency rates for the 1 to 30-day and 61 to 90-day buckets decreased by 20 and 10 basis points, respectively, from the previous quarter. The company's international business achieved profitability and expects total loan volume in the Philippines to double in 2025. AI development was a priority, with research and development expenses increasing by 177% year-over-year to RMB412 million. The AI systems contributed to cost savings of RMB44 million for the year. The insurance brokerage segment faced a challenging year, with total premiums over RMB4.4 billion, down 10% year-over-year, but showed strong life insurance renewal rates of 96%. Yiren Digital announced a cash dividend of US$0.22 per ADS for the second half of 2024, reflecting its commitment to shareholder returns. Looking ahead, the company expects revenue for 2025 to be between RMB5.5 billion and RMB6.5 billion, with a healthy net profit margin.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.