FUTU Stock Study (6-4-26)

Posted by Mark on July 6, 2026 at 07:20 | Last modified: June 4, 2026 08:59

I recently did a stock study on Futu Holdings Ltd ADR (FUTU, $96.32).

M* writes:

     > Futu Holdings Ltd is an online broker providing one-stop online
     > investing services.. Through its proprietary digital platforms,
     > Futubull and Moomoo, the Company provides a full range of
     > investment services, including trade execution and clearing,
     > margin financing and securities lending, and wealth management.
     > The Group engages in online brokerage services and margin
     > financing services. It generates its revenue in the form of
     > brokerage commission and handling charge services, and interest
     > income. Geographically, it operates in Hong Kong, which derives
     > key revenue and it also has its presence in other countries.

Since 2020 (ADR became available for trade in ’19), this medium-size company has grown sales and earnings 40.2% and 44.9% per year, respectively. Lines are up, mostly straight, and parallel. Shares outstanding increase 7.7% (1.5%/year).

Since 2020, PTPM leads peer and industry averages but trails the industry while increasing from 43.8% to 60.0% (’25) with a last-5-year mean of 49.5%. ROE leads the industry but trails peer averages while ranging from 12.9% in ’21 to 30.8% in ’25 with a last-5-year mean of 18.9% (shareholder equity consistently positive with 14.6% CAGR). Debt-to-Capital is less than peer and industry averages while falling from 57.3% to 30.4% (’25) with a last-5-year mean of 23.8%.

Quick ratio is 0.6 and interest coverage at least 9.0 per M* who assigns “Narrow” [quantitative] Economic Moat but a D grade for Financial Health (per BetterInvesting® website).

With regard to sales growth:

• YF gives YOY ACE 4.1% and 10.4% for ’26 and ’27, respectively (based on 9 analysts).
• Zacks gives YOY ACE 5.1% and 8.5% for ’26 and ’27 (3 analysts).
• M* gives 2-year ACE of 2.4% per year.

My 2.0% per year forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 23.4% YOY and 17.7% per year for ’27 and ’26-’28, respectively (based on 22 analysts).
• Nasdaq.com gives ACE 18.7% YOY and 19.2% per year for ’27 and ’26-’28 (4 / 4 / 3 analysts for ’26 / ’27 / ’28).
• Seeking Alpha projects 4-year CAGR of 5.0%.
• Finviz gives 5-year annualized ACE of 9.7% (2).
• LSEG projects LTG of 11.6%.
• YF gives YOY ACE 14.0% contraction and 36.5% growth for ’26 and ’27, respectively (8).
• Zacks gives YOY ACE 4.1% and 18.7% growth for ’26 and ’27 along with 5-year CAGR of 9.5% (4).

My 5.0% forecast is bottom of the long-term-estimate range (mean of four: 9.0%). Initial value is 2026 Q1 EPS of $9.09/share (TTM) rather than ’25 EPS of $10.29.

My Forecast High P/E is 17.0. Since 2020, high P/E falls from 39.3 to 19.7 (’25) with last-5-year mean (excluding 86.3 upside outlier in ’21) of 22.7 and a last-5-year-mean average P/E (also excluding corresponding low P/E outlier) of 15.5. I am below the 6-year range.

My Forecast Low P/E is 7.0. Over the past decade, low P/E ranges from 6.3 in ’20 to 9.2 in ’23 with last-5-year mean/median of 8.2 (14.4 in ’21 excluded). I am forecasting below the average.

My Low Stock Price Forecast (LSPF) of $63.60 is default based on initial value from above: 34.0% less than previous close and 21.0% less than the 52-week low.

Payout Ratio (PR) is 40.0% in ’24 but zero otherwise. I am forecasting zero.

These inputs land FUTU in the BUY zone with a U/D ratio of 3.1. Total Annualized Return (TAR) is 17.8%.

PAR (using Forecast Average—not High—P/E) of 11.0% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on only 21 studies done in the past 90 days (my study and 4 outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 13.9%, 12.7%, 21.7, 9.0, and 21.0%. I am lower across the board.

MS high / low EPS are $16.95 / $9.95 versus my $11.61 / $9.09 (per share). My high EPS is less due to a lower growth rate.

MS LSPF of $90.00 implies a Forecast Low P/E equal to the above-stated 9.0. MS LSPF is 41.5% greater than mine, however.

MOS is robust in the study because my inputs are less than most historical/analyst/MS averages/ranges. MS TAR exceeding mine by a whopping 10.0% supports the assessment along with my substantially lower LSPF.

With regard to valuation, PEG is 0.3 and 2.0 per M* and my projected P/E: fairly valued on average. Relative Value [(current P/E) / 5-year-mean average P/E] is low at 0.70 (with ’21 P/E excluded). M* reports the stock at a 11% discount.

My hesitation with this stock is two-fold. First, the M* Financial Health grade (albeit probably quantitative as no analyst appears to be assigned). Second, Northern Trust cautions [these two may not be unrelated, either]:

     > Chinese ADRs come with unique structural, regulatory, and
     > geopolitical risks that mean they should not be trusted to the same
     > degree as U.S. equities. While they offer exposure to massive growth,
     > investors face severe vulnerabilities regarding legal ownership,
     > auditing transparency, and sudden government intervention.

Per U/D, FUTU is a BUY right now under $98/share. Given a forecast high price ~$197, the BetterInvesting® TAR criterion is met [197.4 / ((14.87 / 100 ) +1 ) ^ 5] ~ $99 (no dividend).

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