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Should You Buy, Sell or Hold FUTU Stock After 123% YTD Surge?
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Key Takeaways
FUTU shares have soared 123.4% YTD but have slipped 1.6% in the past month amid sector strength.
Futu Holdings' funded accounts rose 41% y/y to 2.9M, with more than half now outside Hong Kong.
Analysts project the 2025 sales to grow 38% and EPS to jump 66.9%, backed by recent upward estimate revisions.
Futu Holdings Limited (FUTU - Free Report) shares have grown a whopping 123.4% in the year-to-date period, outperforming the 42.3% jump of its industry and the 15.1% rise in the Zacks S&P 500 Composite.
YTD Price Performance
Image Source: Zacks Investment Research
However, the recent performance tends to draw a different picture. FUTU shares have declined 1.6% over the past month compared with the industry’s 10.5% rally and the Zacks S&P 500 Composite's 2.7% rise. It highlights that the stock is going through a correction phase.
Let us analyze further to conclude whether investors should buy, hold or sell this stock.
FUTU’s Client Growth & International Expansion
Futu Holdings has displayed a strong momentum in its client-base expansion with the addition of nearly 262,000 funded accounts in the first quarter of 2025. This took the total count to 2.7 million, a 42% upsurge from the year-ago quarter. This uptrend was followed in the second quarter, when FUTU reported a total funded account of 2.9 million, a 41% year-over-year increment.
During the June-end quarter earnings call, the management stated that it expects 800,000 net new funded accounts in 2025. If this lofty expectation comes to fruition, then total funded accounts at the end of the year will surpass the 3.5-million mark.
The Hong Kong market has led in new funded accounts in the first quarter of 2025 and the preceding quarter. Despite the improvement achieved in this region, the stiffness in international expansion was concerning. Futu Holding managed to reach a milestone in international expansion in the June-end quarter, with more than 50% of funded accounts from clients outside Hong Kong.
The largest markets included the United States and Singapore, followed by Malaysia and Japan. Australia and Canada showed strength in their growth momentum as well. Expanding global footprint shifts FUTU’s reliance on Hong Kong and mitigates client concentration risks.
Futu Holdings’ stock is currently priced at 19.67 times forward 12-month earnings per share, lower than the industry’s average of 30.38 times. In terms of the trailing 12-month EV-to-EBITDA ratio, FUTU is trading at 9.12 times, below the industry average of 42.01 times. Trading at a discount on both counts reinforces our expectation of the company’s long-term growth.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
FUTU’s return on equity (ROE) of 26.4% stands way above the industry average of 6.8%. In terms of return on invested capital (ROIC), FUTU, with 15.6%, exceeds the industry average of 3.7%. The company’s ROE and ROIC paint a solid picture of profitability, suggesting that it is maximizing returns.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
On the liquidity front, Futu Holdings’ current ratio in the second quarter of 2025 was 1.18, unchanged from the prior quarter. Although this figure is below the industry average of 1.78, it remains above 1, indicating that the company can comfortably meet its short-term obligations.
Image Source: Zacks Investment Research
Futu Holdings’ Solid Top & Bottom-Line Outlook
The Zacks Consensus Estimate for FUTU’s 2025 sales is $2.4 billion, indicating a 38.2% year-over-year rally, and the same is anticipated to rise 6.4% in 2026. The consensus estimate for earnings is set at $8.36 per share for 2025, implying a 66.9% year-over-year surge, with a 11.2% rise expected for 2026.
Over the past 60 days, two EPS estimates for both 2025 and 2026 have been revised upward with a single downward adjustment. During the same period, the Zacks Consensus Estimate for 2025 earnings has increased 6.2%, and the estimate for 2026 has risen 6%. These upward revisions highlight analysts' confidence.
FUTU’s Interest Rate Risk Ordeal
In the first quarter of 2025, the decline in the Hong Kong Inter-Bank Offered Rate (HIBOR) provided a significant boost in clients' trading activities in terms of velocity, improving trading commissions. However, the sharp decline in HIBOR was considered to be a one-off event, triggered by certain mega IPOs in Hong Kong. Although this trend has somewhat sustained during the second quarter of 2025, a certain boost in HIBOR is expected in the near term.
Our estimate is based on Eddie Yue's commentary published in the Hong Kong Monetary Authority's (HKMA) official column on 11th July of this year, which stated that individuals to be cautious of the potential rebound of the HIBOR. We can confidently state that the rebound has taken place, assessing the 1-month HIBOR, which is 3.5% at present compared with near-zero lows at the end of July. This can reduce FUTU’s trading activity significantly.
Futu Holdings Deal With Highly Competitive Pressure
FUTU tackles significant competition from UP Fintech Holding Limited (TIGR - Free Report) and Robinhood Markets (HOOD - Free Report) . UP Fintech Holding Limited focuses on its Tiger Trade app, which has low pricing and strong customer acquisition promotions. Unlike FUTU, UP Fintech Holding Limited offers a risk-free demo account, which can deter new traders.
Futu Holdings’ international expansion in the United States is greatly hindered by the presence of Robinhood Markets, which targets the mass market and newer traders. Robinhood Markets’ crypto trading has been a major growth driver, which is limited in the case of Futu Holdings since licenses act as a hindrance to operating its crypto business outside of Mainland China.
Hold Futu Holdings for Now
FUTU’s client base has strengthened heavily and we expect the same to expand in the near future. International expansion has reduced its client concentration risks. The stock is trading at a discounted valuation, making it highly appealing to growth-oriented investors. A robust liquidity and profitability position further strengthens FUTU’s financial prowess. A strong top and bottom-line outlook looks promising. Rising HIBOR and competitive pressure from TIGR and HOOD are major tailwinds.
Looking at the stock’s recent performance, we can conclude that FUTU has been sailing through a wave of a correction phase. Hence, investors are urged to adopt a cautious approach and refrain from adding this stock to their portfolio now. Potential buyers are recommended to hold off on investing and watch for further share price adjustments before buying.
Image: Bigstock
Should You Buy, Sell or Hold FUTU Stock After 123% YTD Surge?
Key Takeaways
Futu Holdings Limited (FUTU - Free Report) shares have grown a whopping 123.4% in the year-to-date period, outperforming the 42.3% jump of its industry and the 15.1% rise in the Zacks S&P 500 Composite.
YTD Price Performance
However, the recent performance tends to draw a different picture. FUTU shares have declined 1.6% over the past month compared with the industry’s 10.5% rally and the Zacks S&P 500 Composite's 2.7% rise. It highlights that the stock is going through a correction phase.
Let us analyze further to conclude whether investors should buy, hold or sell this stock.
FUTU’s Client Growth & International Expansion
Futu Holdings has displayed a strong momentum in its client-base expansion with the addition of nearly 262,000 funded accounts in the first quarter of 2025. This took the total count to 2.7 million, a 42% upsurge from the year-ago quarter. This uptrend was followed in the second quarter, when FUTU reported a total funded account of 2.9 million, a 41% year-over-year increment.
During the June-end quarter earnings call, the management stated that it expects 800,000 net new funded accounts in 2025. If this lofty expectation comes to fruition, then total funded accounts at the end of the year will surpass the 3.5-million mark.
The Hong Kong market has led in new funded accounts in the first quarter of 2025 and the preceding quarter. Despite the improvement achieved in this region, the stiffness in international expansion was concerning. Futu Holding managed to reach a milestone in international expansion in the June-end quarter, with more than 50% of funded accounts from clients outside Hong Kong.
The largest markets included the United States and Singapore, followed by Malaysia and Japan. Australia and Canada showed strength in their growth momentum as well. Expanding global footprint shifts FUTU’s reliance on Hong Kong and mitigates client concentration risks.
FUTU: Favorable Valuation, Liquidity & Profitability
Futu Holdings’ stock is currently priced at 19.67 times forward 12-month earnings per share, lower than the industry’s average of 30.38 times. In terms of the trailing 12-month EV-to-EBITDA ratio, FUTU is trading at 9.12 times, below the industry average of 42.01 times. Trading at a discount on both counts reinforces our expectation of the company’s long-term growth.
FUTU’s return on equity (ROE) of 26.4% stands way above the industry average of 6.8%. In terms of return on invested capital (ROIC), FUTU, with 15.6%, exceeds the industry average of 3.7%. The company’s ROE and ROIC paint a solid picture of profitability, suggesting that it is maximizing returns.
On the liquidity front, Futu Holdings’ current ratio in the second quarter of 2025 was 1.18, unchanged from the prior quarter. Although this figure is below the industry average of 1.78, it remains above 1, indicating that the company can comfortably meet its short-term obligations.
Futu Holdings’ Solid Top & Bottom-Line Outlook
The Zacks Consensus Estimate for FUTU’s 2025 sales is $2.4 billion, indicating a 38.2% year-over-year rally, and the same is anticipated to rise 6.4% in 2026. The consensus estimate for earnings is set at $8.36 per share for 2025, implying a 66.9% year-over-year surge, with a 11.2% rise expected for 2026.
Over the past 60 days, two EPS estimates for both 2025 and 2026 have been revised upward with a single downward adjustment. During the same period, the Zacks Consensus Estimate for 2025 earnings has increased 6.2%, and the estimate for 2026 has risen 6%. These upward revisions highlight analysts' confidence.
FUTU’s Interest Rate Risk Ordeal
In the first quarter of 2025, the decline in the Hong Kong Inter-Bank Offered Rate (HIBOR) provided a significant boost in clients' trading activities in terms of velocity, improving trading commissions. However, the sharp decline in HIBOR was considered to be a one-off event, triggered by certain mega IPOs in Hong Kong. Although this trend has somewhat sustained during the second quarter of 2025, a certain boost in HIBOR is expected in the near term.
Our estimate is based on Eddie Yue's commentary published in the Hong Kong Monetary Authority's (HKMA) official column on 11th July of this year, which stated that individuals to be cautious of the potential rebound of the HIBOR. We can confidently state that the rebound has taken place, assessing the 1-month HIBOR, which is 3.5% at present compared with near-zero lows at the end of July. This can reduce FUTU’s trading activity significantly.
Futu Holdings Deal With Highly Competitive Pressure
FUTU tackles significant competition from UP Fintech Holding Limited (TIGR - Free Report) and Robinhood Markets (HOOD - Free Report) . UP Fintech Holding Limited focuses on its Tiger Trade app, which has low pricing and strong customer acquisition promotions. Unlike FUTU, UP Fintech Holding Limited offers a risk-free demo account, which can deter new traders.
Futu Holdings’ international expansion in the United States is greatly hindered by the presence of Robinhood Markets, which targets the mass market and newer traders. Robinhood Markets’ crypto trading has been a major growth driver, which is limited in the case of Futu Holdings since licenses act as a hindrance to operating its crypto business outside of Mainland China.
Hold Futu Holdings for Now
FUTU’s client base has strengthened heavily and we expect the same to expand in the near future. International expansion has reduced its client concentration risks. The stock is trading at a discounted valuation, making it highly appealing to growth-oriented investors. A robust liquidity and profitability position further strengthens FUTU’s financial prowess. A strong top and bottom-line outlook looks promising. Rising HIBOR and competitive pressure from TIGR and HOOD are major tailwinds.
Looking at the stock’s recent performance, we can conclude that FUTU has been sailing through a wave of a correction phase. Hence, investors are urged to adopt a cautious approach and refrain from adding this stock to their portfolio now. Potential buyers are recommended to hold off on investing and watch for further share price adjustments before buying.
FUTU has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.