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Futu Holdings
(NASDAQ:FUTU)
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Rating:72Outperform
Price Target:
$103.00
▲(3.66% Upside)
Action:Reiterated
Date:05/29/26
The score is driven primarily by strong underlying financial performance (high margins, strong recent growth and ROE) and supportive valuation (low P/E with a dividend). These positives are tempered by weak technicals (price below key moving averages with negative MACD) and earnings-call risk factors, led by the large regulatory penalty and continued Mainland China regulatory exposure despite reiterated guidance and strong operating momentum.
Positive Factors
High profitability and revenue growth
Sustained very high gross and net margins with accelerating revenue indicate durable earnings power and operating leverage from a tech-driven brokerage model. This supports strong cash generation capacity and the ability to reinvest in product, markets, and shareholder returns over the medium term.
Negative Factors
Material regulatory penalty and enforcement risk
A proposed RMB1.85B CSRC penalty is a structural operational risk: it materially reduced reported earnings and signals heightened regulator scrutiny. Potential rectification, restrictions or additional fines could reshape product access, compliance costs, and revenue from mainland-linked activities for months to years.
Read all positive and negative factors
Positive Factors
Negative Factors
High profitability and revenue growth
Sustained very high gross and net margins with accelerating revenue indicate durable earnings power and operating leverage from a tech-driven brokerage model. This supports strong cash generation capacity and the ability to reinvest in product, markets, and shareholder returns over the medium term.
Read all positive factors
Futu Holdings (FUTU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.62B
Dividend Yield2.55%
Average Volume (3M)1.57M
Price to Earnings (P/E)11.1
Beta (1Y)1.42
Revenue Growth52.73%
EPS Growth52.01%
CountryUS
Employees3,540
SectorFinancial
Sector Strength70
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)72.08
Shares Outstanding95,750,480
10 Day Avg. Volume1,414,216
30 Day Avg. Volume1,568,967
Financial Highlights & Ratios
PEG Ratio0.15
Price to Book (P/B)4.45
Price to Sales (P/S)7.81
P/FCF Ratio4.37
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$166.16Price Target Upside67.23% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)71.49
Revenue Forecast (FY)$23.20B
Futu Holdings Business Overview & Revenue Model
Company Description
Futu Holdings Limited is a global provider of digital brokerage services for securities and the distribution of wealth management products, with operations based in Hong Kong. The company's primary offerings include a full spectrum of online finan...
How the Company Makes Money
Futu primarily generates revenue from a combination of (1) brokerage-related fees and commissions, (2) interest income from financing activities, and (3) wealth management and other service fees. Brokerage revenue comes from commissions and servic...
Futu Holdings Earnings Call Summary
Earnings Call Date:May 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 26, 2026
Earnings Call Sentiment Neutral
The call presented a mix of strong operational momentum (robust account growth, record trading volumes, double-digit revenue and gross profit growth YoY, international expansion, new licenses and product launches, and active buybacks) alongside material near-term challenges — most notably the RMB 1.85 billion regulatory penalty that sharply reduced reported net income and continued regulatory scrutiny related to Mainland China clients. Management emphasized diversified international growth, intact credit facilities, and confidence in long-term prospects, but Q1 earnings were materially impacted by the one-off regulatory adjustment and some sequential softness in interest and brokerage income and higher operating expenses.Positive Updates
Strong Client Growth
Added 225,000 net new funded accounts in Q1; total funded accounts reached 3.59 million, up 34% year-over-year and 7% quarter-over-quarter. Malaysia led client additions for the quarter; Singapore delivered double-digit sequential growth in net new funded accounts.
Negative Updates
Regulatory Administrative Penalty Recognized
Received an Administrative Penalty Pre-Notification Letter from CSRC Shenzhen Bureau for ~RMB 1.85 billion, fully reflected in Q1 statements as an adjusted subsequent event. Net income fell to HKD 831 million, down 61% YoY and 75% QoQ; net income margin at 14.2%. Management stated that, prior to this adjustment, net income would have been HKD 2.9 billion (up 36% YoY) with a 49.9% margin.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Client Growth
Added 225,000 net new funded accounts in Q1; total funded accounts reached 3.59 million, up 34% year-over-year and 7% quarter-over-quarter. Malaysia led client additions for the quarter; Singapore delivered double-digit sequential growth in net new funded accounts.
Read all positive updates
Company Guidance
Management reiterated its full‑year target of 800,000 net new funded accounts and said last Friday’s regulatory update should not materially affect that guidance; the company added 225,000 net new funded accounts in Q1 to reach 3.59 million total (up 34% YoY, 7% QoQ) and expects Q2 net new funded accounts to be roughly stable sequentially. Based on the current Q2 run‑rate, management sees potential for double‑digit sequential growth in AUM and trading volume while interest income is expected to remain broadly stable QoQ; margin financing and securities lending balances rose 8% QoQ to HKD 72.9 billion and period‑end wealth client assets were HKD 178.4 billion (up 28% YoY). They also noted Mainland China funded accounts were ~13% of Q2 funded accounts (≈17% of client assets, ≈20% of revenue), Malaysia is expected to breakeven within 6–12 months, credit facilities remain intact, and the company has repurchased ~USD 418 million of ADSs under a USD 800 million program.Futu Holdings Financial Statement Overview
Summary
Income Statement
Balance Sheet
Cash Flow
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 24.01B | 22.81B | 13.59B | 10.01B | 7.61B | 7.12B |
| Gross Profit | 21.07B | 19.87B | 11.14B | 8.47B | 6.62B | 5.91B |
| EBITDA | 14.81B | 13.86B | 6.80B | 5.18B | 3.72B | 3.30B |
| Net Income | 10.05B | 11.32B | 5.44B | 4.28B | 2.93B | 2.81B |
Balance Sheet | ||||||
| Total Assets | 246.32B | 228.42B | 158.76B | 97.14B | 94.50B | 101.54B |
| Cash, Cash Equivalents and Short-Term Investments | 23.65B | 130.54B | 14.42B | 8.19B | 5.74B | 5.83B |
| Total Debt | 22.51B | 17.68B | 8.55B | 5.89B | 2.69B | 21.91B |
| Total Liabilities | 204.83B | 188.10B | 130.75B | 72.56B | 73.64B | 80.55B |
| Stockholders Equity | 41.19B | 40.00B | 28.01B | 24.57B | 20.86B | 20.99B |
Cash Flow | ||||||
| Free Cash Flow | 0.00 | 40.73B | 30.83B | -6.42B | 3.38B | 5.94B |
| Operating Cash Flow | 0.00 | 40.79B | 31.00B | -6.34B | 3.47B | 6.01B |
| Investing Cash Flow | 0.00 | -1.78B | 103.93M | -2.44B | 93.86M | -963.57M |
| Financing Cash Flow | 0.00 | 4.30B | 70.85M | 2.31B | -7.01B | 10.55B |
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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $24.08B | 25.62 | 13.64% | 0.52% | 18.26% | 66.10% | |
80 Outperform | $181.18B | 19.20 | 20.40% | 1.16% | 11.20% | 48.07% | |
78 Outperform | $33.35B | 15.16 | 24.51% | 1.25% | 7.75% | 12.12% | |
72 Outperform | $14.62B | 11.08 | 26.62% | 2.62% | 52.73% | 52.01% | |
68 Neutral | $922.53M | 7.38 | 13.81% | ― | 48.35% | 37.83% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
62 Neutral | $26.53B | 30.41 | 17.04% | 0.37% | 38.08% | -22.75% |
* Financial Sector Average
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Futu Holdings Corporate Events
Futu’s Q1 2026 Profit Hit by China Regulatory Penalty Despite Strong Growth
May 28, 2026
Futu reported strong operating metrics for the quarter ended March 31, 2026, with funded accounts up 34.3% year-over-year to 3.59 million, total users reaching 30.2 million and client assets climbing 47.2% to HK$1.22 trillion, underpinned by recor...
Futu Faces Potential RMB1.85 Billion CSRC Penalty Over Mainland China Operations
May 22, 2026
On May 22, 2026, Futu Holdings said it has received a Notice of Investigation and an Administrative Penalty Pre-Notification Letter from the China Securities Regulatory Commission related to its mainland China operations. Regulators allege that ce...
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.