Now trading at a price of $180.0, Futu has moved -7.3% so far today.
Futu returned gains of 96.0% last year, with its stock price reaching a high of $202.53 and a low of $70.6. Over the same period, the stock outperformed the S&P 500 index by 77.6%. More recently, the company's 50-day average price was $177.67. 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 Its Shares Are Expensive:
Futu has a trailing twelve month P/E ratio of 24.5, 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 32.6. 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 1.02. 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 0.75 whereas the sector average is 1.78. The company's shares are currently trading 859.5% 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.
There's an Analyst Consensus of Some Upside Potential for Futu:
The 18 analysts following Futu have set target prices ranging from $133.14354 to $279.75467 per share, for an average of $212.5 with a buy rating. The company is trading -15.3% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Futu has an average amount of shares sold short because 7.5% of the company's shares are sold short. Institutions own 46.6% 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 $776,202,660.
