Futu Holdings Ltd (FUTU, Financial), a burgeoning player in the capital markets industry, has experienced a notable fluctuation in its stock price recently. With a current market capitalization of $8.46 billion, the stock is trading at $60.57. Over the past week, FUTU has seen a minor setback with a 1.40% loss. However, looking at a broader timeframe, the stock has gained an impressive 23.06% over the past three months. According to GuruFocus.com's valuation metrics, the stock is currently modestly undervalued with a GF Value of $77.27, compared to a past GF Value of $93.83. This indicates a shift from being significantly undervalued three months ago to its current valuation status.
Introduction to Futu Holdings Ltd
Futu Holdings Ltd operates in the dynamic field of capital markets, offering comprehensive online investing services through its digital platform, Futu NiuNiu. The platform provides users with market data, trading services, and news feeds for equity markets across Hong Kong, Mainland China, Singapore, and the United States. The company's revenue streams primarily from brokerage commissions and handling charge services. 
Assessing Futu's Profitability
Futu Holdings boasts a strong Profitability Rank of 8/10, indicating robust financial health and the likelihood of continued profitability. The company's operating margin stands at an impressive 51.57%, outperforming 84.9% of its industry peers. Its return on equity (ROE) is 19.13%, surpassing 85.53% of competitors, while the return on assets (ROA) at 3.92% is better than 72.58% of the industry. Furthermore, Futu's return on invested capital (ROIC) is a remarkable 21.41%, which is higher than 88.41% of companies in the same sector. Over the past decade, Futu has maintained profitability for five years, showcasing its financial resilience. 
Growth Trajectory of Futu Holdings
The company's Growth Rank is a perfect 10/10, reflecting its exceptional expansion in both revenue and profitability. Futu's 3-year revenue growth rate per share is a staggering 79.00%, which is higher than 92.46% of the industry. The 5-year revenue growth rate per share is even more impressive at 83.70%, eclipsing 97.69% of industry competitors. Looking ahead, the estimated total revenue growth rate for the next 3 to 5 years is 18.92%, outpacing 94.81% of the industry. The 3-year EPS without NRI growth rate is an extraordinary 151.50%, better than 96.3% of the industry. These figures underscore Futu's strong growth momentum and potential for future gains. 
Notable Shareholders in Futu Holdings
Among the significant holders of Futu Holdings stock, Jim Simons (Trades, Portfolio) leads with 95,900 shares, representing a 0.07% share percentage. Following him is the iShares MSCI ACWI ex U.S. ETF (Trades, Portfolio), holding 10,725 shares, which translates to a 0.01% stake. Steven Cohen (Trades, Portfolio) also has a position in the company, albeit a smaller one, with 4,505 shares. The involvement of these prominent investors could signal confidence in Futu's business model and future prospects.
Competitive Landscape
Futu Holdings operates in a competitive environment, with close rivals such as MarketAxess Holdings Inc (MKTX, Financial) with a market cap of $8.4 billion, Interactive Brokers Group Inc (IBKR, Financial) valued at $8.73 billion, and Houlihan Lokey Inc (HLI, Financial) at $7.09 billion. These companies represent a benchmark for Futu's performance within the capital markets industry.
Conclusion
In summary, Futu Holdings Ltd has demonstrated a robust stock performance, particularly over the past three months with a 23.06% gain. The company's current valuation suggests it is modestly undervalued, presenting a potential opportunity for investors. Futu's profitability and growth metrics are impressive, with high ranks and rates that surpass most of its industry peers. The company's strong financials, coupled with the backing of notable shareholders, position it well against its competitors. As Futu continues to innovate and expand its services, it remains a compelling option for investors looking for exposure to the capital markets sector.
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.
