Futu Holdings Ltd (FUTU, Financial), a leading player in the Capital Markets industry, has seen a significant surge in its stock price over the past three months. As of October 6, 2023, the company's stock price stands at $55.91, marking a 41.60% increase over the past quarter. Despite a slight dip of 2.44% over the past week, the overall performance remains impressive. The company's market cap is currently $7.81 billion, reflecting its substantial presence in the industry.
According to GuruFocus.com's GF Value, which calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates, Futu Holdings Ltd is currently modestly undervalued. The GF Value stands at $75.7, down from $91.34 three months ago, indicating a potential opportunity for investors seeking value.
Unpacking Futu Holdings Ltd
Futu Holdings Ltd is an online broker that provides comprehensive online investing services. The company operates through its digital platform, Futu NiuNiu, offering market data, trading services, and news feeds for equity markets in Hong Kong, Mainland China, Singapore, and the United States. The company's revenue primarily comes from brokerage commission and handling charge services.
Profitability Analysis
Futu Holdings Ltd boasts a high Profitability Rank of 8/10, indicating a strong level of profitability. The company's Operating Margin of 51.57% is better than 85.49% of companies in the same industry. Furthermore, the company's ROE, ROA, and ROIC, which measure the company's profitability in relation to its equity, assets, and invested capital respectively, are all higher than the majority of companies in the industry. Over the past 10 years, the company has maintained profitability for 5 years, outperforming 30.76% of companies in the industry.
Growth Prospects
Futu Holdings Ltd has a Growth Rank of 10/10, indicating a high level of growth. The company's 3-year and 5-year revenue growth rates per share are both higher than the majority of companies in the industry. The company's future 3-year to 5-year total revenue growth rate estimate stands at 18.88%, which is better than 97.26% of companies in the industry. Furthermore, the company's 3-year EPS without NRI growth rate is better than 96.17% of companies in the industry, indicating strong earnings growth.
Top Holders of Futu Holdings Ltd
The top three holders of Futu Holdings Ltd's stock are Baillie Gifford (Trades, Portfolio), Jim Simons (Trades, Portfolio), and iShares MSCI ACWI ex U.S. ETF (Trades, Portfolio). Baillie Gifford (Trades, Portfolio) holds the largest share with 1,113,861 shares, accounting for 0.8% of the total shares. Jim Simons (Trades, Portfolio) holds 95,900 shares, accounting for 0.07% of the total shares. iShares MSCI ACWI ex U.S. ETF (Trades, Portfolio) holds 10,725 shares, accounting for 0.01% of the total shares.
Competitive Landscape
Futu Holdings Ltd operates in a competitive industry with major players such as Evercore Inc (EVR, Financial), Houlihan Lokey Inc (HLI, Financial), and Interactive Brokers Group Inc (IBKR, Financial). Evercore Inc has a market cap of $5 billion, Houlihan Lokey Inc has a market cap of $7.43 billion, and Interactive Brokers Group Inc has a market cap of $9.51 billion. Despite the competition, Futu Holdings Ltd's strong profitability and growth prospects position it well in the industry.
Conclusion
In conclusion, Futu Holdings Ltd's impressive stock performance, strong profitability, and high growth prospects make it a compelling option for investors. Despite the recent dip, the stock's 41.60% surge over the past quarter and its modest undervaluation according to the GF Value indicate potential for further growth. With its robust business model and competitive position in the industry, Futu Holdings Ltd is well-positioned for future success.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
