FUTU Soars 222% in a Year & Beats Industry: How to Play the Stock Now?

Core Insights - Futu Holdings Limited (FUTU) shares have increased by 221.8% over the past year, significantly outperforming its industry and the Zacks S&P 500 Composite [1] - The company has also shown strong year-to-date performance with a 135.1% increase, compared to Mogo's 30.1% rise and Vimeo's 24.9% decline [4] Group 1: International Expansion and Client Engagement - In Q2 2025, over 50% of funded accounts came from clients outside of Futu Securities Hong Kong, with the U.S. and Singapore being the largest markets [5] - The company experienced a 32% year-over-year growth in new funded accounts, driven by successful international expansion strategies [6][10] - Client assets surged by 68.1% year-over-year, with a retention rate above 98%, indicating strong client loyalty [7][10] Group 2: Product and Service Innovation - Futu Holdings is focused on providing a comprehensive trading platform, offering diverse products such as IPO financing, crypto-trading, and structured products [8] - The launch of Futubull AI in Hong Kong and moomoo AI internationally has enhanced the company's product offerings, providing smart investment tools for global investors [9] Group 3: Financial Performance and Valuation - Futu Holdings' stock is currently undervalued, trading at 21.17 times forward 12-month earnings, compared to the industry average of 28.13 times [11] - The company's return on equity (ROE) stands at 26.4%, significantly higher than the industry average of 6.7%, and return on invested capital (ROIC) is at 15.6%, exceeding the industry average of 3.6% [13] - The Zacks Consensus Estimate for FUTU's 2025 sales is $2.4 billion, reflecting a 38.2% year-over-year increase, with earnings expected to rise by 64.5% [16][17] Group 4: Investment Recommendation - The combination of international expansion, innovative products, strong profitability, and liquidity positions Futu Holdings as a fundamentally strong stock [18] - Analysts have shown optimism with upward revisions in earnings estimates, reinforcing the recommendation to buy the stock for long-term returns [19]