FUTU Investors – A Quick Report for You

Futu logged a -2.9% change during today's afternoon session, and is now trading at a price of $47.58 per share.

Over the last year, Futu logged a -4.8% change, with its stock price reaching a high of $67.49 and a low of $35.91. Over the same period, the stock underperformed the S&P 500 index by -26.5%. As of April 2023, the company's 50-day average price was $52.76. Futu Holdings Limited provides digitalized securities brokerage and wealth management product distribution service in Hong Kong and internationally. Based in Sheung Wan, Hong Kong, the mid-cap Finance company has 2,784 full time employees. Futu has not offered a regular dividend during the last year.

The Company Has a Positive Net Current Asset Value:

2019 2020 2021 2022
Revenue (k) $136,282 $427,015 $912,267 $975,969
Revenue Growth n/a 213.33% 113.64% 6.98%
Interest Income (k) -$242 $642 $1,265 -$704
Operating Margins 17% 44% 45% 44%
Net Margins 16% 40% 39% 38%
Net Income (k) $21,267 $170,960 $360,302 $375,178
Depreciation & Amort. (k) $2,124 $3,512 $4,672 $7,013
Earnings Per Share $0.16 $1.63 $2.95 $3.26
EPS Growth n/a 918.75% 80.98% 10.51%
Diluted Shares (k) 917,897 105,014 121,967 115,102
Free Cash Flow (k) $237,641 $2,632,633 $761,770 $433,814
Capital Expenditures $15,193 $5,759 $9,033 $11,603

Futu has rapidly growing revenues and increasing reinvestment in the business, strong operating margins with a positive growth rate, and exceptional EPS growth. However, the firm has positive cash flows. Finally, we note that Futu has just enough current assets to cover current liabilities.

Futu Is Overvalued:

Futu has a trailing twelve month P/E ratio of 13.3, compared to an average of 12.38 for the Finance sector. Based on its EPS guidance of $4.43, the company has a forward P/E ratio of 11.9. According to the 94.3% compound average growth rate of Futu's historical and projected earnings per share, the company's PEG ratio is 0.14. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 11.6%. On this basis, the company's PEG ratio is 1.14. This implies that the shares are fairly valued. Additionally, the market is possibly undervaluing Futu in terms of its equity because its P/B ratio is 0.28 whereas the sector average is 1.58. The company's shares are currently trading 15.3% above their Graham number.

Futu Has an Average Rating of Buy:

The 18 analysts following Futu have set target prices ranging from $45.96 to $85.98 per share, for an average of $68.56 with a buy rating. As of April 2023, the company is trading -23.0% away from its average target price, indicating that there is an analyst consensus of strong upside potential.

Futu has an average amount of shares sold short because 4.5% of the company's shares are sold short. Institutions own 33.6% of the company's shares, and the insider ownership rate stands at 16.41%, suggesting a large amount of insider shareholders. The largest shareholder is Goldman Sachs Group Inc, whose 4% stake in the company is worth $178,342,931.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.