Uxin shares drop 45% as predicted by InvestingPro’s Fair Value model

In a remarkable demonstration of analytical precision, InvestingPro’s Fair Value model accurately predicted a significant price correction for Uxin Limited (NASDAQ:UXIN), saving investors from potential losses. Back in May 2025, when Uxin was trading at $4.53, InvestingPro’s valuation models identified the stock as substantially overvalued, estimating a downside of nearly 38%. Fast forward six months, and that prediction has been validated with the stock now trading at $2.77 – a 45% decline. This case exemplifies how Fair Value analysis helps investors identify mispriced securities, understand intrinsic value, and make more informed decisions about entry and exit points. For investors looking to identify current opportunities, InvestingPro regularly updates its Most overvalued list with stocks showing similar valuation disconnects.

Uxin Limited operates as a used car retailer in China’s competitive Consumer Cyclicals sector. When InvestingPro’s Fair Value model flagged the company as overvalued in May 2025, Uxin was reporting quarterly revenue of $204.6 million, with concerning negative EBITDA of -$41.25 million and EPS of -$6.19. Despite the company’s expansion efforts through various partnerships, the fundamentals didn’t justify the market valuation. In the six months prior to the Fair Value signal, Uxin’s stock had displayed significant volatility, with monthly returns ranging from +19% to -12.5%, creating a challenging environment for investors to accurately gauge its true value.

The subsequent performance validated InvestingPro’s analysis. From the May 2025 Fair Value identification at $4.53, Uxin’s share price steadily declined, with the most substantial drop of 27.75% occurring in October 2025. By November 30, 2025, the stock had settled at $2.77, representing a 45% decline from the overvalued signal price. This performance closely aligned with InvestingPro’s Fair Value estimate of $2.81 at the time of identification, demonstrating the model’s remarkable accuracy in predicting the correction.

Recent developments show Uxin has made some operational progress, with revenue increasing to $231.99 million and losses narrowing slightly (EBITDA improved to -$38.81 million and EPS to -$3.05). The company has announced several partnerships to develop used car superstores in Tianjin, Yinchuan, and Guangzhou, potentially strengthening its retail presence. However, despite these positive business developments, the stock’s valuation has corrected precisely as InvestingPro’s model predicted. Interestingly, the current Fair Value estimate of $2.23 suggests the stock may still be slightly overvalued even after the significant correction.

InvestingPro’s Fair Value methodology combines multiple valuation approaches to determine a stock’s intrinsic worth. The analysis aggregates various models including discounted cash flow, comparable company analysis, and market range analysis, providing a comprehensive view beyond traditional metrics. For Uxin, the model identified a significant disconnect between market price and fundamental value, allowing investors to avoid potential losses by recognizing the overvaluation early.

The Uxin case demonstrates the power of InvestingPro’s analytical tools in identifying mispriced securities before the market corrects. While this opportunity has already played out, InvestingPro subscribers have access to hundreds of similar insights across global markets every day. With features like Fair Value analysis, financial health scores, and exclusive ProTips, investors can identify both overvalued stocks to avoid and undervalued opportunities with significant upside potential. Don’t miss the next major market mispricings – Learn more about InvestingPro and start making more informed investment decisions today.