Core Insights - Futu Holdings Limited has upgraded its Type 1 license to include virtual asset dealing services, allowing it to serve both retail and professional investors in Hong Kong [1] Company Overview - Futu Holdings Limited is a technology-driven company that offers fully digitalized financial services through its platforms, Futubull and moomoo [2] - The company provides a comprehensive range of investment services, including trade execution, margin financing, securities lending, and wealth management [2] - Futu integrates social media tools to enhance user connectivity and engagement within its investment ecosystem [2] - Additionally, the company offers corporate services such as IPO distribution, investor relations, and ESOP solutions [2]

Group 1 - Futu Holdings Limited Sponsored ADR (FUTU) has gained approximately 20.4% year-to-date, outperforming the average gain of 6.4% in the Business Services sector [2][3] - The Zacks Consensus Estimate for FUTU's full-year earnings has increased by 4.6% over the past quarter, indicating improving analyst sentiment [2] - Futu Holdings is part of the Technology Services industry, which includes 172 companies, and has also shown better performance compared to the average gain of 20.4% in this group [3] Group 2 - Kyndryl Holdings, Inc. (KD) has outperformed the sector with a year-to-date return of 25.4% and has a Zacks Rank of 1 (Strong Buy) [2][3] - The consensus EPS estimate for Kyndryl has increased by 22.5% over the past three months, reflecting positive analyst outlook [3] - Both Futu Holdings and Kyndryl Holdings are expected to maintain their solid performance in the Business Services sector [3]

Core Insights - Futu Holdings Limited Sponsored ADR (FUTU) is currently rated as a Strong Buy (1) while Thomson Reuters (TRI) holds a Hold (3) rating, indicating a more favorable outlook for FUTU in terms of earnings estimates and revisions [2]. Valuation Metrics - FUTU has a forward P/E ratio of 14.53, significantly lower than TRI's forward P/E of 45.02, suggesting that FUTU may be undervalued compared to TRI [3]. - The PEG ratio for FUTU is 0.92, indicating a more attractive valuation when considering expected earnings growth, while TRI's PEG ratio stands at 6.31 [3]. - FUTU's P/B ratio is 3.25, compared to TRI's P/B of 6.76, further supporting the notion that FUTU is undervalued relative to TRI [3]. Value Grades - FUTU has a Value grade of B, reflecting its favorable valuation metrics, while TRI has a Value grade of D, indicating less attractiveness from a value perspective [3].

Core Viewpoint - Futu Holdings Limited has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Outlook - The Zacks rating upgrade reflects an upward trend in earnings estimates, which is crucial for stock price movements [1][3]. - Futu Holdings is expected to earn $4.68 per share for the fiscal year ending December 2024, representing a year-over-year increase of 19.4% [5]. Earnings Estimate Revisions - Over the past three months, the Zacks Consensus Estimate for Futu Holdings has increased by 3.5%, indicating a positive revision trend [5]. - The correlation between earnings estimate revisions and near-term stock movements suggests that tracking these revisions can be beneficial for investment decisions [4]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 5% receiving a 'Strong Buy' rating, indicating superior earnings estimate revision features [6][7]. - Historically, Zacks Rank 1 stocks have generated an average annual return of +25% since 1988, showcasing the effectiveness of the rating system [4].

Core Viewpoint - Futu Holdings Limited (FUTU) has experienced a 7.8% decline in share price over the past week, but the formation of a hammer chart pattern suggests potential support and a possible trend reversal in the future [1] Technical Analysis - The hammer chart pattern indicates a potential bottoming out, with reduced selling pressure and a shift in control from bears to bulls [1] - The hammer pattern is characterized by a small candle body and a long lower wick, signaling a potential trend reversal when formed at the bottom of a downtrend [1] - Hammer candles can appear on various timeframes and should be used alongside other bullish indicators for confirmation [1] Fundamental Analysis - Recent upward revisions in earnings estimates for FUTU serve as a bullish indicator, correlating strongly with near-term stock price movements [1] - The consensus EPS estimate for the current year has increased by 3.5% over the last 30 days, indicating strong agreement among analysts regarding improved earnings potential [1] - FUTU holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [1] - The Zacks Rank is a reliable timing indicator for investors to identify improving company prospects [1]

Group 1 - Futu Holdings Limited has completed a HKD440 million investment in Gravitation Fintech HK Limited, becoming the second largest beneficial owner of Airstar Bank with an indirect ownership of 44.11% [1] - Futu is a tech-driven online brokerage and wealth management platform that offers fully digitalized financial services through its proprietary platforms, Futubull and moomoo [2] - The company provides a comprehensive range of investment services, including trade execution, margin financing, securities lending, and wealth management, while also incorporating social media tools to enhance user connectivity [2]

Group 1 - Futu Holdings Limited has completed a HKD440 million investment in Gravitation Fintech HK Limited, the parent company of Airstar Bank, a licensed virtual bank in Hong Kong [1] - Following this investment, Futu has become the second largest beneficial owner of Airstar Bank, holding indirectly 44.11% [1] Group 2 - Futu Holdings Limited is a technology company that offers fully digitalized financial services through its platforms, Futubull and moomoo [2] - The company provides a comprehensive range of investment services, including trade execution, margin financing, and wealth management, while also incorporating social media tools to enhance user connectivity [2] - Additionally, Futu offers corporate services such as IPO distribution, investor relations, and ESOP solution services [2]

Investors looking for stocks in the Technology Services sector might want to consider either Futu Holdings Limited Sponsored ADR (FUTU) or Elastic (ESTC) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is ...

Investment Rating - The report does not provide a specific investment rating for the company, but it suggests actively monitoring the stock due to positive market conditions and growth potential [2]. Core Views - The company reported a revenue of HKD 25.9 billion for Q1 2024, representing a year-over-year increase of 4% and a quarter-over-quarter increase of 9%. Net profit was HKD 10.4 billion, down 13% year-over-year but up 18% quarter-over-quarter [2]. - The brokerage commission income was HKD 10.8 billion, showing no year-over-year growth but a 20% increase quarter-over-quarter. Total trading volume reached HKD 13 trillion, up 10% year-over-year and 40% quarter-over-quarter [2]. - The company has raised its full-year guidance for net new funded clients to 400,000, up from an initial estimate of 350,000, due to strong customer acquisition in overseas markets [2]. Summary by Sections Financial Performance - Q1 2024 revenue was HKD 25.9 billion, with a year-over-year growth of 4% and a quarter-over-quarter growth of 9%. Net profit was HKD 10.4 billion, down 13% year-over-year but up 18% quarter-over-quarter. Non-GAAP net profit was HKD 11.2 billion, down 12% year-over-year and up 18% quarter-over-quarter [2]. - Brokerage commission income was HKD 10.8 billion, with a year-over-year growth of 0% and a quarter-over-quarter growth of 20%. Total trading volume was HKD 13 trillion, with a year-over-year growth of 10% and a quarter-over-quarter growth of 40% [2]. Customer Growth - The company added 177,000 new funded clients in Q1 2024, a quarter-over-quarter increase of 331% and a year-over-year increase of 199%. The total number of funded clients reached 1.89 million, with a year-over-year growth of 24% and a quarter-over-quarter growth of 10% [2]. - The total customer assets reached HKD 517.9 billion, with a year-over-year growth of 11% and a quarter-over-quarter growth of 7% [2]. Cost Management - The gross margin for Q1 2024 was 81.9%, down 6.5 percentage points year-over-year but up 0.2 percentage points quarter-over-quarter. Research and development expenses were HKD 340 million, with a rate of 13%, down 1 percentage point year-over-year [2]. - Sales expenses increased to HKD 290 million, with a rate of 11%, up 6 percentage points year-over-year, primarily due to the significant growth in new funded clients [2]. Market Outlook - The report indicates that the company is well-positioned to benefit from the rebound in Chinese assets and plans to launch higher-commission cryptocurrency trading services in Hong Kong and Singapore [2]. - The company is actively expanding its overseas market presence and diversifying its product offerings, which is expected to create new growth opportunities [2].

Torsten Asmus/iStock via Getty ImagesElevator Pitch Futu Holdings Limited (NASDAQ:FUTU) is assigned a Buy investment rating. I previewed Futu Holdings' financial results for the final quarter of the prior year in my February 22, 2024 article. This latest write-up analyzes FUTU's most recent financial disclosures. FUTU recorded above-expectations revenue and EPS for Q1 2024. The company's future looks bright, given that its new client net additions guidance for the current year was revised upwards by +14 ...