Here’s Why We Think X Financial (NYSE:XYF) Is Well Worth Watching

Investors are often guided by the idea of discovering ‘the next big thing’, even if that means buying ‘story stocks’ without any revenue, let alone profit. But as Peter Lynch said in One Up On Wall Street, ‘Long shots almost never pay off.’ While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

If this kind of company isn’t your style, you like companies that generate revenue, and even earn profits, then you may well be interested in X Financial (NYSE:XYF). While this doesn’t necessarily speak to whether it’s undervalued, the profitability of the business is enough to warrant some appreciation – especially if its growing.

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X Financial’s Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Recognition must be given to the that X Financial has grown EPS by 46% per year, over the last three years. While that sort of growth rate isn’t sustainable for long, it certainly catches the eye of prospective investors.

One way to double-check a company’s growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. It’s noted that X Financial’s revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. X Financial shareholders can take confidence from the fact that EBIT margins are up from 32% to 69%, and revenue is growing. Ticking those two boxes is a good sign of growth, in our book.

The chart below shows how the company’s bottom and top lines have progressed over time. Click on the chart to see the exact numbers.

NYSE:XYF Earnings and Revenue History September 27th 2025

See our latest analysis for X Financial

While profitability drives the upside, prudent investors always check the balance sheet, too.

Are X Financial Insiders Aligned With All Shareholders?

Theory would suggest that it’s an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So those who are interested in X Financial will be delighted to know that insiders have shown their belief, holding a large proportion of the company’s shares. To be exact, company insiders hold 54% of the company, so their decisions have a significant impact on their investments. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. At the current share price, that insider holding is worth a staggering CN¥321m. This is an incredible endorsement from them.

Does X Financial Deserve A Spot On Your Watchlist?

X Financial’s earnings have taken off in quite an impressive fashion. This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top. At times fast EPS growth is a sign the business has reached an inflection point, so there’s a potential opportunity to be had here. So at the surface level, X Financial is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. We don’t want to rain on the parade too much, but we did also find 2 warning signs for X Financial that you need to be mindful of.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in the US with promising growth potential and insider confidence.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.