Futu Holdings (FUTU) Stocks: Attractive and Prospective for Investment

Futu Holdings Inc is a holding company that digitizes brokerage and management platforms in China, Hong Kong, and the United States. FUTU's performance as of Q3 2023 has shown improvement, but its stock price has declined by -8.54% to $47.79/share at the time this article was written. However, this decline is not particularly concerning because FUTU's current performance is strong, and it has a fairly reasonable valuation. Here is our review of FUTU's stock.

1. Rapidly Improving Performance

In its financial report for 3Q 2023, FUTU recorded revenue of HK$7.63 billion, a 43.16% increase from HK$5.33 billion in the 3Q 2022 period. Meanwhile, the EPS value also increased by 79.19% from HK$13.59 to HK$24.29 year on year in the same period. This indicates that FUTU is capable of rapid growth in 2023. Looking at FUTU's growth performance since 2020 or the past 3 years, the company's revenue has increased with an average annual growth rate of 111.5%, and EPS has increased by 268% per year. FUTU's performance has consistently improved in recent years, making it one of the rapidly growing stocks at present. FUTU's stock has a DER ratio of 3.1, which is relatively high, but given its positive performance, this can still be tolerated.

2. Relatively Low Valuation

At a stock price of $47.79, FUTU has a past P/E ratio of 18.3 and a PBV of 2.4, which is quite low for a rapidly growing company. FUTU's EPS for the full year 2023 is expected to increase, and with an estimated EPS of 4.16, the current forward P/E ratio for FUTU is only 11.5. Despite a -8.5% decline in the past year, the stock has increased by 223% since March 2019, indicating that its stock price has risen in line with its fundamental developments.

Conclusion

FUTU's stock is a growth stock with strong performance in 2023. Unlike many growth stocks in the United States with high valuations, FUTU's stock has a low and attractive valuation for investment. If FUTU continues to deliver positive growth performance like this, its stock is likely to rise rapidly in the future.