Futu Holdings Stock (FUTU) Great Growth and Undervalue in Q3 2025 Earnings

Futu Holdings (NASDAQ: FUTU) has emerged as one of the most compelling growth stories in the global fintech and online brokerage space. Following its outstanding Q3 2025 earnings report, the company demonstrated not only explosive revenue and earnings growth but also impressive profitability metrics that rival many mature financial institutions. Despite its strong stock price performance over the past year, Futu’s valuation remains reasonable relative to its growth rate, suggesting that the market may still be underappreciating the company’s long-term potential. In this article we will dive into Futu Holdings recent earnings, stock performance & valuation, growth potential, and the risks investor should consider.

About Futu Holdings

Futu Holdings, founded in 2012 and headquartered in Hong Kong, is a technology-driven online brokerage and wealth management company. It operates the moomoo platform for international markets and Futubull for Hong Kong and mainland China users, offering access to global stocks, ETFs, options, and other financial products. By emphasizing advanced technology, intuitive user experience, and community-driven features, Futu has built a scalable, high-engagement platform and expanded into multiple international markets.

Futu Holdings Financial Performance

Futu Holdings delivered an outstanding Q3 2025 financial performance, demonstrating strong growth across all key metrics. Revenue for the quarter reached $761.9 million, nearly doubling from $388.8 million in Q3 2024, representing a 95.96% year-over-year increase, while EPS surged to $2.93 from $1.21, up 142.15%. On a trailing twelve-month basis, revenue rose to $2.44 billion compared to $1.3 billion a year earlier, an increase of 87.06%, and EPS climbed to $8.94 from $4.09, reflecting 118.68% growth. The company also maintained exceptional profitability, with a Gross profit margin of 93.92% and a Net profit margin of 51.66%, alongside solid returns on capital, including a 4.03% return on assets and a 30.27% return on equity. Futu’s balance sheet remains healthy, supported by a low debt-to-equity ratio of 0.37.

Over the past five years, Futu Holdings has grown its revenue and net income at a 42.3% CAGR, which is impressive, as the growth rate remains rapid this year as well.

Futu Holdings Fiscal 2025 Financial Forecast

Looking ahead, analysts forecast 2025 revenue of $2.86 billion, a 63.37% increase from 2024, and Non-GAAP EPS of $10.02, up 89.08% year over year. Reflecting this strong outlook, Wall Street analysts assign a Strong Buy rating to the stock, with an average price target of $227.56, implying 38.58% upside, and a high-end target of $300, offering potential upside of 82.68%.

FUTU Stock Price Performance and Valuation

At the time this article was written Futu’s stock was trading at $164.21 per share. The stock has gained 105.2% over the past year, significantly outperforming the S&P 500, which rose only 16.3% during the same period. Over the past five years, FUTU shares are up 258.9%, far exceeding the S&P 500’s 82.2% increase, highlighting consistent long-term outperformance. 

Despite this strong rally, the stock’s valuation remains attractive, trading at a TTM Price to sales P/S ratio of 9.35 and a forward P/S of 8, alongside a Non-GAAP Price to earnings P/E of 16.89 and a forward Non-GAAP P/E of 16.38.

Based on Fiscal.ai data, an analysis of valuation over the past five years shows that both the forward P/S and forward P/E are below their historical averages. The forward P/E is significantly below the historical average, which may indicate potential undervaluation. Given Futu’s robust revenue and earnings growth, high profitability, and strong future forecasts, these valuation multiples suggest the stock is still undervalued and continues to offer an attractive risk-reward profile for long-term investors

Futu Holdings Growth Potential

Futu Holdings growth potential remains solid driven by several factors

• 1. Global Market Expansion and Accelerating Funded Account Growth
  Futu’s international expansion has become the key driver of client growth. In Q3 2025, the company added 254,000 net new funded accounts, up 65% year over year and 25% sequentially, bringing total funded accounts to 3.13 million, a 43% annual increase. Growth is increasingly diversified, with more than 50% of funded accounts coming from outside Hong Kong by Q2 2025, reducing single-market dependence.
  Malaysia led expansion with 41% year-over-year growth, surpassing one million users and benefiting from localized product offerings. Australia and New Zealand saw strong adoption, with Moomoo becoming Australia’s most downloaded trading app. Japan and Canada also delivered record account additions. Supported by stable acquisition costs of about HK$2,300 per account, Futu’s multi-market strategy significantly lowers growth risk.
• 2. High-Margin Interest Income and Securities Financing Leverage
  Interest income has emerged as Futu’s largest revenue driver, generating HK$3.05 billion in Q3 2025, up 79.2% year over year and accounting for 47.6% of total revenue. This segment includes margin financing, securities borrowing, and bank deposit interest, forming a highly scalable, recurring model with strong gross margins of 87.8%. Growth has been fueled by expanding margin activity as client assets rose 79% year over year to HK$1.24 trillion, increasing the asset base supporting margin loans with minimal incremental costs.
  Futu’s competitive margin rates across US, Hong Kong, China A-shares, and Japan enhance platform attractiveness while sustaining healthy yields. With client assets up 27% sequentially in Q3 alone, even modest increases in margin utilization present meaningful upside. Importantly, recurring interest income improves revenue visibility and helps offset trading commission volatility during weaker market conditions.
• 3. Cross-Asset Ecosystem Development and Wealth Management Monetization
  Futu is rapidly diversifying beyond brokerage commissions by building an integrated wealth management and alternative asset ecosystem. Wealth management assets surged 80% year over year to HK$175.6 billion by Q3 2025, underscoring strong client adoption. Corporate services also contributed meaningfully, as Futu partnered with nearly half of Hong Kong’s IPOs in Q3, with 12 listings on Futubull each drawing over HK$100 billion in retail subscriptions. ESOP services gained strong traction, with contracted clients rising 46% quarter over quarter to more than 800, supporting a high-margin professional services business.
  Cryptocurrency offerings expanded sharply, with crypto assets nearly doubling and trading volume up 161% quarter over quarter following new product launches. Structured products and income-plus solutions also attracted inflows in a rate-cut environment. Together, these higher-margin segments enhance platform stickiness, reduce churn, and increase lifetime wallet share.

Risks to Consider

While Futu stock looks attractive, we should be mindful of potential risks

• Competitive Pressures
  Intense competition from global and regional online brokerages continues to pressure margins and market share, forcing Futu to sustain rapid innovation across platforms such as Futubull and moomoo. Escalating rivalry in Asian markets may challenge user acquisition and retention, particularly as competitors offer aggressive pricing and incentives. These dynamics could weigh on growth efficiency and investor expectations, especially given Futu’s competition risks.
• Regulatory Risks
  Futu operates under strict oversight in Hong Kong, the US, and China, where changes in securities trading, data privacy, or cross-border rules could impose penalties, limit operations, or revoke licenses. Past actions, like China's 2022 ban on new mainland accounts for Futu due to unauthorized cross-border activities, highlight ongoing scrutiny that persists into 2025. US delisting risks under the HFCAA also loom if PCAOB audits of Chinese firms remain restricted.
• Market Volatility Risks
  Futu’s revenue remains sensitive to trading volumes, exposing the business to economic downturns, interest rate changes, and periods of reduced investor activity. Weak market sentiment, heightened volatility, or geopolitical tensions can materially lower transaction-based income. During broader equity market corrections, brokerage activity may decline sharply, increasing earnings variability and underscoring the company’s cyclical exposure despite ongoing diversification efforts.

Read More: Palomar Holdings Stock (PLMR) Great Growth and Undervalue in Q3 2025

Conclusion

Futu Holdings stands out as a high-quality growth company, supported by strong financial performance, exceptional profitability, and a solid balance sheet. The company’s rapid revenue and earnings expansion, combined with its scalable technology-driven platform and expanding global presence, positions it well for continued long-term growth. Despite its strong stock price performance, valuation remains reasonable relative to growth prospects, making FUTU an attractive investment opportunity for growth-oriented investors willing to tolerate moderate risk.

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