FUTU gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 237 industry peers in the Capital Markets industry. While FUTU has a great profitability rating, there are quite some concerns on its financial health. FUTU is growing strongly while it is still valued neutral. This is a good combination!

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

FUTU had positive earnings in the past year.
FUTU had positive earnings in each of the past 5 years.
Of the past 5 years FUTU 4 years had a positive operating cash flow.

1.2 Ratios

Looking at the Return On Assets, with a value of 4.03%, FUTU is in the better half of the industry, outperforming 60.76% of the companies in the same industry.
FUTU has a Return On Equity of 26.93%. This is amongst the best in the industry. FUTU outperforms 92.41% of its industry peers.
Looking at the Return On Invested Capital, with a value of 20.53%, FUTU belongs to the top of the industry, outperforming 97.05% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for FUTU is significantly above the industry average of 7.28%.
The last Return On Invested Capital (20.53%) for FUTU is above the 3 year average (14.12%), which is a sign of increasing profitability.

		Industry Rank	Sector Rank
ROA	4.03%
ROE	26.93%
ROIC	20.53%

ROA(3y)3.64%

ROA(5y)3.11%

ROE(3y)16.96%

ROE(5y)16.05%

ROIC(3y)14.12%

ROIC(5y)11.45%

1.3 Margins

Looking at the Profit Margin, with a value of 47.11%, FUTU belongs to the top of the industry, outperforming 89.03% of the companies in the same industry.
In the last couple of years the Profit Margin of FUTU has grown nicely.
The Operating Margin of FUTU (58.30%) is better than 94.94% of its industry peers.
FUTU's Operating Margin has improved in the last couple of years.
The Gross Margin of FUTU (85.66%) is better than 90.30% of its industry peers.
In the last couple of years the Gross Margin of FUTU has grown nicely.

		Industry Rank	Sector Rank
OM	58.3%
PM (TTM)	47.11%
GM	85.66%

OM growth 3Y2.89%

OM growth 5Y22.44%

PM growth 3Y0.47%

PM growth 5Y24.32%

GM growth 3Y-0.42%

GM growth 5Y2.22%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The number of shares outstanding for FUTU has been reduced compared to 1 year ago.
Compared to 5 years ago, FUTU has more shares outstanding
FUTU has a better debt/assets ratio than last year.

2.2 Solvency

Based on the Altman-Z score of 1.05, we must say that FUTU is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 1.05, FUTU perfoms like the industry average, outperforming 58.65% of the companies in the same industry.
FUTU has a Debt/Equity ratio of 0.36. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.36, FUTU is in the better half of the industry, outperforming 69.62% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.36
Debt/FCF	N/A
Altman-Z	1.05

ROIC/WACCN/A

WACCN/A

2.3 Liquidity

FUTU has a Current Ratio of 1.16. This is a normal value and indicates that FUTU is financially healthy and should not expect problems in meeting its short term obligations.
FUTU's Current ratio of 1.16 is in line compared to the rest of the industry. FUTU outperforms 54.01% of its industry peers.
FUTU has a Quick Ratio of 1.16. This is a normal value and indicates that FUTU is financially healthy and should not expect problems in meeting its short term obligations.
FUTU has a Quick ratio (1.16) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	1.16
Quick Ratio	1.16

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

FUTU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 110.96%, which is quite impressive.
The Earnings Per Share has been growing by 90.12% on average over the past years. This is a very strong growth
The Revenue has grown by 80.74% in the past year. This is a very strong growth!
Measured over the past years, FUTU shows a very strong growth in Revenue. The Revenue has been growing by 66.52% on average per year.

EPS 1Y (TTM)110.96%

EPS 3Y28.79%

EPS 5Y90.12%

EPS Q2Q%134.2%

Revenue 1Y (TTM)80.74%

Revenue growth 3Y24.07%

Revenue growth 5Y66.52%

Sales Q2Q%86.34%

3.2 Future

Based on estimates for the next years, FUTU will show a very strong growth in Earnings Per Share. The EPS will grow by 27.39% on average per year.
Based on estimates for the next years, FUTU will show a very strong growth in Revenue. The Revenue will grow by 31.93% on average per year.

EPS Next Y89.51%

EPS Next 2Y45.09%

EPS Next 3Y27.39%

EPS Next 5YN/A

Revenue Next Year74.94%

Revenue Next 2Y41.58%

Revenue Next 3Y31.93%

Revenue Next 5YN/A

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.

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4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 17.63 indicates a rather expensive valuation of FUTU.
The rest of the industry has a similar Price/Earnings ratio as FUTU.
The average S&P500 Price/Earnings ratio is at 28.32. FUTU is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 14.63 indicates a correct valuation of FUTU.
Compared to the rest of the industry, the Price/Forward Earnings ratio of FUTU is on the same level as its industry peers.
FUTU is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.

		Industry Rank	Sector Rank
PE	17.63
Fwd PE	14.63

4.2 Price Multiples

FUTU's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. FUTU is cheaper than 85.23% of the companies in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	12.63

4.3 Compensation for Growth

FUTU's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of FUTU may justify a higher PE ratio.
FUTU's earnings are expected to grow with 27.39% in the coming years. This may justify a more expensive valuation.