Should You Buy, Sell or Hold FUTU Stock After 123% YTD Surge?

Core Insights - Futu Holdings Limited (FUTU) shares have increased by 123.4% year-to-date, outperforming the industry and the S&P 500 Composite [1][8] - Recent performance shows a decline of 1.6% over the past month, contrasting with a 10.5% rally in the industry [4][8] Client Growth & International Expansion - Futu Holdings added nearly 262,000 funded accounts in Q1 2025, bringing the total to 2.7 million, a 42% increase year-over-year [5] - In Q2 2025, the total funded accounts rose to 2.9 million, marking a 41% year-over-year growth [5] - Management anticipates 800,000 net new funded accounts in 2025, potentially exceeding 3.5 million by year-end [6] - Over 50% of funded accounts are now from clients outside Hong Kong, indicating successful international expansion [7][9] Financial Performance & Valuation - FUTU's stock is priced at 19.67 times forward 12-month earnings, below the industry average of 30.38 times [10] - The trailing 12-month EV-to-EBITDA ratio is 9.12 times, significantly lower than the industry average of 42.01 times [10] - Return on equity (ROE) stands at 26.4%, well above the industry average of 6.8% [13] - Return on invested capital (ROIC) is 15.6%, exceeding the industry average of 3.7% [13] - The current ratio is 1.18, indicating the company can meet short-term obligations despite being below the industry average of 1.78 [15] Sales & Earnings Outlook - The Zacks Consensus Estimate for FUTU's 2025 sales is $2.4 billion, reflecting a 38.2% year-over-year increase [18] - Earnings per share (EPS) is projected at $8.36 for 2025, implying a 66.9% year-over-year surge [18] - Recent upward revisions in EPS estimates indicate analysts' confidence in FUTU's growth [19] Competitive Landscape - FUTU faces significant competition from UP Fintech Holding Limited and Robinhood Markets, which have strong customer acquisition strategies [22][23] - Robinhood's crypto trading capabilities present a challenge for FUTU, which is limited by licensing issues outside Mainland China [23] Conclusion - Futu Holdings has shown strong client growth and international expansion, reducing client concentration risks [24] - The stock is trading at a discounted valuation, appealing to growth-oriented investors [24] - Despite a robust financial position, rising HIBOR and competitive pressures are notable challenges [24][25]