Futu logged a 2.1% change during today's morning session, and is now trading at a price of $169.75 per share.
Futu returned gains of 29.9% last year, with its stock price reaching a high of $199.86 and a low of $70.6. Over the same period, the stock outperformed the S&P 500 index by 13.1%. More recently, the company's 50-day average price was $173.56. Futu Holdings Limited provides digitalized securities brokerage and wealth management product distribution service in Hong Kong and internationally. Based in Admiralty, Hong Kong, the Large-Cap Finance company has 3,343 full time employees. Futu has not offered a dividend during the last year.
Exceptional Profitability Overshadowed by Excessive Leverage:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $136 | $427 | $912 | $976 | $1,281 | $1,750 |
| Interest Income (M) | -$0 | $1 | $1 | -$1 | $4 | $203 |
| Operating Margins | 17% | 44% | 45% | 44% | 50% | 49% |
| Net Margins | 16% | 40% | 39% | 38% | 43% | 40% |
| Net Income (M) | $21 | $171 | $360 | $375 | $548 | $701 |
| Depreciation & Amort. (M) | $2 | $4 | $5 | $7 | $8 | $49 |
| Diluted Shares (M) | 918 | 1,050 | 1,220 | 1,151 | 1,120 | 1,120 |
| Earnings Per Share | $0.16 | $1.26 | $2.3 | $2.54 | $3.82 | $4.86 |
| EPS Growth | n/a | 687.5% | 82.54% | 10.43% | 50.39% | 27.23% |
| Free Cash Flow (M) | $238 | $2,633 | $762 | $434 | -$821 | $3,969 |
| CAPEX (M) | $15 | $6 | $9 | $12 | $10 | $22 |
| Total Debt (M) | $726 | $3,135 | $4,609 | $3,742 | $4,890 | $7,134 |
| Net Debt / EBITDA | 27.14 | 15.75 | 9.74 | 7.08 | 6.52 | 6.24 |
Futu has rapidly growing revenues and increasing reinvestment in the business and strong operating margins with a positive growth rate. Additionally, the company's financial statements display exceptional EPS growth and generally positive cash flows. However, the firm has a highly leveraged balance sheet.
an Exceptionally Low P/B Ratio but Priced at a Premium:
Futu has a trailing twelve month P/E ratio of 24.0, compared to an average of 15.92 for the Finance sector. Based on its EPS guidance of $5.45, the company has a forward P/E ratio of 31.8. According to the 65.5% compound average growth rate of Futu's historical and projected earnings per share, the company's PEG ratio is 0.37. 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 24.0%. On this basis, the company's PEG ratio is 1.0. This suggests that its shares are undervalued. Additionally, the market is possibly undervaluing Futu in terms of its equity because its P/B ratio is 0.71 whereas the sector average is 1.78. The company's shares are currently trading 804.9% below their Graham number. In conclusion, Futu's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
Analysts Give Futu an Average Rating of Buy:
The 17 analysts following Futu have set target prices ranging from $134.11638 to $269.8179 per share, for an average of $205.4 with a buy rating. The company is trading -17.4% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Futu has an above average percentage of its shares sold short because 9.2% of the company's shares are sold short. Institutions own 45.5% of the company's shares, and the insider ownership rate stands at 15.94%, suggesting a large amount of insider shareholders. The largest shareholder is HHLR Advisors, LTD, whose 5% stake in the company is worth $732,023,812.
