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Is It Too Late to Buy Futu Holdings Limited Stock?

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs

Heightened interest in Futu Holdings Limited follows significant news that could shape market dynamics. A new strategic alliance with a top-tier financial service provider and vibrant quarterly earnings reports have caught investors’ eyes. As a result, Futu Holdings Limited’s stocks are trading up by 4.62 percent on Tuesday, reflecting growing market confidence in the company’s upward trajectory.

  • Significantly surpassing Q2 expectations, Futu Holdings reported a $400.7M revenue, marking a strong growth with a year-over-year global user increase of 13.3% and trading volume surge of 21.1%.
  • BofA analyst Emma Xu raised the price target to $80.20 from $77.60, backing a solid “Buy” rating due to Futu Holdings’ stellar Q2 results and positive outlook.
  • Despite a reduction in the price target to $79 from $100 by Citi analyst Judy Zhang, the “Buy” rating stays, indicating confidence in asset inflows driving future earnings growth amid economic uncertainties.
  • Futu Holdings saw higher Q2 earnings with EPS rising to 8.66 HKD, beating analyst predictions, alongside a notable revenue uptick to 3.13B HKD.
  • A positive Q2 2024 financial report from Futu Holdings showed significant growth in users, client assets, and trading volume, reinforcing strong market performance.

Candlestick Chart

Live Update at 16:43:51 EST: On Tuesday, September 17, 2024 Futu Holdings Limited stock [NASDAQ: FUTU] is trending up by 4.62%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Futu Holdings Limited’s Recent Earnings Report and Key Financial Metrics

Futu Holdings Limited once again proves its mettle in the financial market with its Q2 earnings report, showcasing numbers that would stir excitement in any investor’s heart. Their reported revenue hit a staggering $400.7M, smashing past expectations of $363.96M, and painting a vibrant picture of growth. It’s like watching a rocket take off right from the launch pad—thrilling and unstoppable!

This growth isn’t just in the numbers but reflected in the pulse of their operations. The number of global users has surged by 13.3%, bringing the tally to 23.3 million. Meanwhile, paying clients have grown by a robust 28.8%, now standing at two million, with a retention rate that is nothing short of impressive at a solid 98%. The thrill of seeing these figures climb is akin to watching a skilled surfer catching and riding the perfect wave—effortless yet awe-inspiring.

In terms of client assets, there is more good news. Total assets saw an impressive 11.9% quarter-over-quarter rise, now towering at $74.2 billion. This is complemented by a robust trading volume surge, which saw a 21.1% increase over the previous quarter. The numbers here indicate a market sweep of over $207.7 billion in trading volume—a milestone itself.

BofA analyst Emma Xu’s raise of the firm’s price target to $80.20 from $77.60 shows confidence. The forecasted increase in earnings between 2024-26 signals further strong performance expected from FUTU. This analyst upgrade is like a seasoned captain guiding their ship towards calm waters, promising smoother sails ahead.

However, not every sentiment is through rose-colored glasses. Citi analyst Judy Zhang lowered the price target to $79 from $100, yet maintained a “Buy” rating. The note highlighted that despite rate cuts and recession risks, solid Q2 earnings and asset inflows could be more significant in driving future gains. It’s comparable to a skilled pilot re-evaluating the flight path to ensure the best route in turbulence.

The backdrop of the recent price data shows a stock on the move. From 56.78 on 13 Sep 2024 to closing at 60.37 on 17 Sep 2024, it’s a dance of numbers with closing values showing gradual yet positive upward movement. This trend hints at FUTU holding steady potential for upward trajectory—a marathon runner gradually gaining speed as they approach the finish line.

In terms of valuation measures, FUTU shows a healthy PE ratio of 14.44, not too high, suggesting it isn’t overly expensive yet promising returns. This is juxtaposed with a price-to-book ratio of 2.52. Perhaps one of the brightest highlights here is their return on equity (ROE) which stands at 7.39—a medal-worthy performance in managing profitability with shareholders’ equity.

When we delve into more granular details like the balance sheet, FUTU holds a significant amount of cash and cash equivalents totaling $49B. This buffer not only cushions the company against any unforeseen market volatilities but also enables strategic investments for growth. Their retained earnings at $11.36B further indicate prudent management and profitable operations.

This symphony of numbers and metrics isn’t just about strong current performance. It’s also a hint at future potential. With a total capitalization standing at a substantial $24.57B, it’s evident the company is on a strong footing for future endeavours.

Opposing Analyst Perspectives on FUTU:

Within the varied economic landscape, analyst opinions often reflect different shades of the same picture. Futu Holdings Limited found favor from BofA analyst Emma Xu, who bumped up the firm’s price target to $80.20 from $77.60, maintaining a Buy rating. Emma Xu pointed to Q2’s stellar performance and forecasted continued earnings growth from 2024 through 2026.

On the flip side, Citi analyst Judy Zhang offered a more skeptical lens despite acknowledging the satisfactory Q2 earnings. Lowering Futu’s price target to $79 from $100 painted a less buoyant picture, but retaining the Buy rating indicated enduring confidence in the company’s trajectory.

More Breaking News

This duality in perspectives mirrors a classic tug-of-war: while both analysts acknowledge Futu’s resilience and growth, projections about future earnings and economic factors paint different forecasts. This dichotomy could be viewed as navigating through fog—while the exact destination may vary, the consensus is that the ship is still on course.

Financial Reports:

Diving into Futu’s financial reporting for Q2 2024 offers a goldmine of valuable insights. Revenue for this quarter saw a 25.9% year-of-year leap, landing at $400.7M, accompanied by a non-GAAP adjusted net income of $166M, up by 8.6%. This uptick is akin to a bakery regularly selling out of fresh-baked bread—consistent demand and supply.

Moreover, the client base has grown to 23.3 million globally, marking a 13.3% increase. Similarly, the two million paying clients constitute almost a 28.8% rise. What’s notable is the impressive client retention rate above 98%, showing that customers are not just enticed but wholly committed. Imagine a bustling café where patrons keep coming back for the same heartwarming coffee—it’s loyalty pure and simple.

Expanding on the reported trading volume, an increase of 21.1% translates into more than $207.7 billion worth of trades. That’s no mean feat—it’s like watching a grand symphony, every note perfectly played, creating an overarching harmony.

Combining these financial metrics and earnings, Futu Holdings is positioned as a solid contender within its market. The numbers are not just figures on a page; they embody the thriving pulse of a company that’s seen consistent growth and promising future potential.

Market Trends and Future Outlook:

Examining the recent trends and the movement in stock prices reveals an active market responding positively to Futu Holdings’ solid performance. From a swift glance, trading over the last few days presents a positive outlook—with closing values stepping up from 56.78 to 60.37. It’s a pattern indicating enduring resilience, much like a fortified dam holding strong against the flowing current.

For one, the global user increase and paying clients spikes reveal a growing trust in Futu Holdings’ services. As investors pile in, it only adds more weight to the burgeoning strength. Plus, significant trading volume surges evoke high market participation—a clear sign of healthy investor engagement.

The company’s current valuation metrics support a thesis of continued growth. An enterprise value complemented by a manageable PE ratio and an inviting price-to-book ratio suggests that Futu Holdings is trading at a fair value, if not intriguing, for future potential gains.

With such performance and high-quality analyses from major financial analysts, the outlook for Futu Holdings remains rosy. What we observe through these metrics is not just past success but a promising road ahead—a clear call to watch this space for more.

Summarizing, the picture painted by these myriad data points outlines a story of a company on a steady rise, buoyed by solid financial principles and exemplary performance. Investors are excited, analysts are divided, but one thing is clear: Futu Holdings Limited holds a marquee position worth keeping an eye on.

Futu Holdings Limited, standing strong amid economic uncertainties, has consistently shown robust performance, reflected through their impressive Q2 financial results. As we turn the pages of their earnings report, each figure narrates a tale of growth, resilience, and a bright future. From analysts’ confidence votes to market trends, Futu Holdings proves to be a promising contender in the financial market, commanding attention and suggesting growth. It’s time for investors to ponder—will Futu Holdings continue this upward journey, inviting more success and higher returns? The tale is compelling, and the next chapters await with anticipation.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”