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Futu Holdings Ltd (FUTU)
NASDAQ:FUTU
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Futu Holdings
(NASDAQ:FUTU)
Rating:77Outperform
Price Target:
$182.00
▲(11.24%Upside)
Positive Factors
Client Growth
FUTU has been growing its client base, AUM and revenues by 20-25% per annum over the last three years, and strong growth is expected to continue and accelerate.
Cryptocurrency Market
FUTU's recent entry into crypto trading and possible future stablecoin offerings should help cement the company as a leader in online brokerage.
Financial Performance
Futu reported strong 1Q25 results, achieving another record high quarter of revenue and profit.
Negative Factors
Client Acquisition
Run-rate new paying clients declined double-digit sequentially from a high base.
Interest Rates
Declining HIBOR rates are anticipated to negatively impact Futu's pre-tax operating profit if they persist.
Market Conditions
Potential earnings headwind from sharply reduced HIBOR and potential market pullback in HK/US.
Futu Holdings (FUTU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.42B
Dividend YieldN/A
Average Volume (3M)2.47M
Price to Earnings (P/E)27.8
Beta (1Y)1.34
Revenue Growth56.04%
EPS Growth58.58%
CountryUS
Employees3,343
SectorFinancial
Sector Strength73
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)1.96
Shares Outstanding94,783,490
10 Day Avg. Volume3,369,146
30 Day Avg. Volume2,465,248
Financial Highlights & Ratios
PEG Ratio1.37
Price to Book (P/B)6.04
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$156.38Price Target Upside-4.42% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Futu Holdings Business Overview & Revenue Model
Company DescriptionFutu Holdings (FUTU) is a leading digital brokerage and wealth management platform primarily serving Chinese investors. The company operates through its proprietary platform, Futubull, which provides a range of financial services including securities trading, margin financing, wealth management, and market data services. Futu Holdings is known for its technology-driven approach, offering a seamless and user-friendly interface backed by robust security measures. The company's mission is to make investing easier and more accessible for its users through continuous innovation and exceptional service.
How the Company Makes MoneyFutu Holdings generates revenue through multiple streams primarily centered around its digital brokerage services. The company earns commissions from securities trading on its platform, which constitutes a significant portion of its income. Additionally, Futu offers margin financing services, allowing clients to borrow funds to trade securities, thereby earning interest income from these loans. The platform also provides subscription-based market data services, offering users access to in-depth analysis and insights for a fee. Beyond these core services, Futu has ventured into wealth management, where it earns management fees by providing investment advisory services. Strategic partnerships with financial institutions and technology companies further bolster its revenue by enhancing service offerings and expanding its client base.
Futu Holdings Earnings Call Summary
Earnings Call Date:May 29, 2025
(Q1-2025)
| % Change Since: 51.90%|
Next Earnings Date:Sep 02, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance for Futu Holdings with significant growth in funded accounts, revenue, and client assets driven by strategic initiatives and favorable market conditions. Despite some challenges such as increased operating expenses and interest rate impacts, the company shows robust growth potential and confidence in achieving its annual targets.Q1-2025 Updates
Positive Updates
Record New Funded Accounts
Futu Holdings added approximately 262,000 new funded accounts in Q1 2025, representing a 48% increase year-over-year and a 22% increase quarter-over-quarter. The total funded accounts reached 2.7 million, up 42% from a year ago.
Strong Revenue Growth
Total revenue for Q1 2025 was HKD 4.7 billion, marking an 81% increase from HKD 2.6 billion in Q1 2024. Brokerage commission and handling charge income increased by 113% year-over-year.
Total Client Assets Surge
Total client assets reached HKD 830 billion, up 60% year-over-year and 12% quarter-over-quarter, driven by record net asset inflow.
Introduction of Futubull AI
Futubull AI, a smart investment assistant, was launched with a satisfaction rate of around 90% and plans to expand to international markets in Q2.
Increased Trading Volume
Total trading volume reached HKD 3.22 trillion in Q1 2025, up 140% year-over-year, with U.S. equity trading rising 8% sequentially.
Wealth Management Growth
Wealth management plan assets grew to HKD 139.2 billion, up 118% year-over-year and 26% quarter-over-quarter.
Negative Updates
Interest Rate Impact on Income
The recent decline in HIBOR may affect net interest income, although the impact is expected to be mitigated by increased trading activities.
Increased Operating Expenses
Total operating expenses increased by 36% year-over-year, with significant increases in R&D, selling and marketing, and G&A expenses.
Challenges in Crypto Trading
Crypto prices experienced a pullback affecting investor enthusiasm, although the company remains optimistic about long-term potential.
Company Guidance
During the first quarter of 2025, Futu Holdings demonstrated robust growth with key metrics reflecting strong performance. The company added approximately 262,000 new funded accounts, marking a 48% year-over-year and 22% quarter-over-quarter increase, bringing the total to 2.7 million accounts. This growth aligns with their annual target of 800,000 net new funded accounts. Total client assets surged to HKD 830 billion, a 60% year-over-year and 12% quarter-over-quarter rise, driven by record net asset inflow and a rally in Hong Kong equities. Additionally, total trading volume reached HKD 3.22 trillion, up 140% year-over-year and 11% quarter-over-quarter. The introduction of Futubull AI, a smart investment assistant, received a satisfaction rate of about 90%, highlighting its effectiveness. Financially, Futu reported a total revenue of HKD 4.7 billion, an 81% increase from the previous year, with net income rising by 107% year-over-year to HKD 2.1 billion, reflecting a net income margin of 45.6%. These metrics underscore Futu's strategic growth and market expansion trajectory for 2025.Futu Holdings Financial Statement Overview
Summary
Futu Holdings demonstrates strong revenue growth and profitability with high margins and no debt. However, inconsistent cash flow performance suggests challenges in cash management.Income Statement
Futu Holdings has demonstrated strong revenue growth, with Total Revenue increasing significantly over the years. The Gross Profit Margin remains high at 100% for 2024, indicating effective cost management. Net Profit Margin has also improved, reaching 45.5% in 2024 from 47.05% in 2023. The EBIT Margin is robust at 55.3% for 2024. However, the absence of EBITDA data in 2024 slightly limits the full profitability assessment.85
Very Positive
Balance Sheet
The company maintains a strong equity position with Stockholders' Equity steadily rising. The Debt-to-Equity Ratio is favorable at 0, indicating no debt burden. The Return on Equity (ROE) is impressive, rising to 19.4% in 2024, suggesting efficient use of equity. Equity Ratio stands at 17.5% for 2024, reflecting a balanced asset structure. The lack of debt enhances financial stability but also limits leverage for potential growth.78
Positive
Cash Flow
Cash flow performance is mixed. The Free Cash Flow has fluctuated, showing significant declines in recent years. The Operating Cash Flow to Net Income Ratio is unavailable for 2024, limiting insight into cash conversion efficiency. The Free Cash Flow to Net Income Ratio is also not calculable due to missing data, indicating potential challenges in cash management.65
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 13.59B | 9.10B | 7.32B | 6.74B | 3.13B |
| Gross Profit | 11.14B | 7.56B | 6.33B | 5.53B | 2.43B |
| EBITDA | 6.80B | 5.18B | 3.63B | 3.31B | 1.53B |
| Net Income | 5.44B | 4.28B | 2.93B | 2.81B | 1.33B |
Balance Sheet | |||||
| Total Assets | 159.70B | 97.14B | 94.50B | 101.54B | 71.34B |
| Cash, Cash Equivalents and Short-Term Investments | 14.42B | 4.94B | 5.03B | 5.72B | 1.33B |
| Total Debt | 8.55B | 5.89B | 2.69B | 11.09B | 11.16B |
| Total Liabilities | 131.70B | 72.56B | 73.64B | 80.55B | 63.03B |
| Stockholders Equity | 28.01B | 24.57B | 20.86B | 20.99B | 8.31B |
Cash Flow | |||||
| Free Cash Flow | 30.83B | -6.42B | 3.38B | 5.94B | 20.41B |
| Operating Cash Flow | 31.00B | -6.34B | 3.47B | 6.01B | 20.46B |
| Investing Cash Flow | 103.93M | -2.44B | 93.86M | -963.57M | -244.18M |
| Financing Cash Flow | 70.85M | 2.31B | -7.01B | 10.55B | 8.41B |
Futu Holdings Technical Analysis
Positive
163.61
Price Trends
124.41
Positive
111.77
Positive
102.67
Positive
Market Momentum
12.81
Negative
72.39
Negative
76.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FUTU, the sentiment is Positive. The current price of 163.61 is above the 20-day moving average (MA) of 143.45, above the 50-day MA of 124.41, and above the 200-day MA of 102.67, indicating a bullish trend. The MACD of 12.81 indicates Negative momentum. The RSI at 72.39 is Negative, neither overbought nor oversold. The STOCH value of 76.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FUTU.
Futu Holdings Risk Analysis
Futu Holdings disclosed 98 risk factors in its most recent earnings report. Futu Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Futu Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $28.20B | 33.17 | 19.15% | 0.77% | 12.25% | 20.76% | |
77 Outperform | $7.42B | 27.85 | 23.44% | ― | 56.04% | 58.58% | |
77 Outperform | $227.72B | 16.11 | 14.13% | 2.60% | 6.31% | 45.50% | |
76 Outperform | $1.91B | 24.29 | 13.18% | ― | 52.63% | 96.46% | |
72 Outperform | $8.77B | 10.85 | 21.71% | 0.30% | -2.79% | 1.33% | |
70 Outperform | $8.02B | 36.83 | 16.25% | 1.40% | 7.22% | -15.53% | |
62 Neutral | AU$10.03B | 9.04 | 11.83% | 4.87% | 33.36% | 41.81% |
* Financial Sector Average
Performance Comparison
FUTU
Futu Holdings
163.61
103.75
173.32%
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121.88%
MKTX
Marketaxess Holdings
211.45
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-5.03%
MS
Morgan Stanley
143.01
42.05
41.65%
TIGR
Up Fintech Holding
10.57
6.45
156.55%
XP
XP
16.56
-0.31
-1.84%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.