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 $8.29 billion, the stock is trading at $59.36. Over the past week, FUTU has seen a 2.18% decline, yet this short-term loss is overshadowed by a significant 23.28% gain over the past three months. According to the GF Value, the stock is currently modestly undervalued at a GF Value of $72.95, maintaining the same valuation status as three months ago when the GF Value was slightly lower at $72.77.
Introduction to Futu Holdings Ltd
Futu Holdings Ltd operates as an innovative online brokerage firm, offering a comprehensive suite of investing services through its digital platform, Futu NiuNiu. The platform caters to the Hong Kong, Mainland China, Singapore, and United States equity markets, providing market data, trading services, and news feeds. The company's revenue streams primarily from brokerage commissions and handling charge services. 
Assessing Futu's Profitability
Futu's financial health is reflected in its impressive Profitability Rank of 8/10. The company's Operating Margin stands at a robust 50.03%, outperforming 80.37% of its peers in the industry. Its Return on Equity (ROE) is equally strong at 18.82%, surpassing 81.35% of competitors. The Return on Assets (ROA) at 4.28% and Return on Invested Capital (ROIC) at 21.32% further demonstrate Futu's efficiency in utilizing its assets and capital to generate profits, ranking better than 70.47% and 85.63% of companies, respectively. Over the past decade, Futu has maintained profitability for five years, showcasing its resilience and potential for sustained financial success. 
Exploring Futu's Growth Trajectory
The company's Growth Rank is a perfect 10/10, reflecting its exceptional expansion. Futu's 3-Year Revenue Growth Rate per Share is an impressive 79.00%, eclipsing 92.72% of its industry counterparts. The 5-Year Revenue Growth Rate per Share is even more remarkable at 83.70%, outpacing 97.41% of similar companies. Looking ahead, Futu's Total Revenue Growth Rate is estimated at 20.11% for the next 3 to 5 years, which is superior to 95.56% of companies. The 3-Year EPS without NRI Growth Rate stands at a staggering 151.50%, and the EPS Growth Rate for the next 3 to 5 years is projected at 13.91%, both indicating a strong upward momentum in earnings. 
Investment Firms Taking Notice
Several notable investment firms have taken positions in Futu Holdings Ltd, albeit with relatively small share percentages. Jefferies Group (Trades, Portfolio) holds 60,200 shares, representing 0.04% of the company's shares. Philippe Laffont (Trades, Portfolio) owns 30,161 shares, equating to 0.02% share percentage. Additionally, the iShares MSCI ACWI ex U.S. ETF (Trades, Portfolio) has a stake of 10,428 shares, or 0.01% of the company's shares. These investments, while modest, signal confidence in Futu's market potential from seasoned investors.
Competitive Landscape
In comparison to its competitors, Futu Holdings Ltd holds its own in the capital markets industry. MarketAxess Holdings Inc (MKTX, Financial) has a market cap of $7.71 billion, Interactive Brokers Group Inc (IBKR, Financial) boasts a $12.1 billion market cap, and Houlihan Lokey Inc (HLI, Financial) is valued at $8.89 billion. These figures provide context for Futu's market position, indicating that it is a significant player within a competitive field.
Conclusion
In conclusion, Futu Holdings Ltd's recent stock performance reflects a short-term dip but a substantial gain over the past quarter. The company remains modestly undervalued according to the GF Value, with strong profitability and growth metrics that rank highly within the industry. While investment firms hold minor stakes in Futu, the company's competitive standing is solid when compared to its peers. Investors may find Futu's robust financials and growth prospects to be compelling reasons for considering it as a potential addition to their portfolios.
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.
