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Futu Holdings Limited Defies Gravity: What’s Next for Investors?

Timothy SykesAvatar
Written by Timothy Sykes
Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
Updated 10/3/2024, 1:07 pm ET 7 min read

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  • FUTU-3.15%
    FUTU - NYSEFutu Holdings Limited
    $93.61-3.04 (-3.15%)
    Volume:  1.48M
    Float:  56.22M
    $91.39Day Low/High$96.50

Futu Holdings Limited’s shares are experiencing an upward movement, trading up by 6.16 percent on Thursday. This surge is buoyed by recent positive news coverage highlighting the company’s strategic expansion into new markets and potential partnerships. Investor confidence is further bolstered by optimistic forecasts about Futu’s growth trajectory and its continued strong performance in digital finance solutions.

  • BofA has increased its price target for Futu Holdings to $90, highlighting the positive Q3 guidance and favorable market trends in China and Hong Kong as key catalysts.
  • In a noteworthy move, Tencent Holdings has sold a portion of its Futu stock, reaping $206M in proceeds, contributing to a stock price surge of around 8%.
  • On another front, Futu has shown resilience among its peers, marking a stock increase by 3.1%, standing strong amid its counterpart ADRs in the US.

Candlestick Chart

Live Update at 09:06:53 EST: On Thursday, October 03, 2024 Futu Holdings Limited stock [NASDAQ: FUTU] is trending up by 6.16%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Unpacking Futu Holdings Limited Recent Earnings and Financial Metrics

Digging into the essence of Futu’s financial statements unveils a tapestry of intriguing narratives. Over the years, this company has crafted a tale, marked by numbers and trends. Not just a brokerage, but a saga of wealth management, Futu blends track records with whispers of what’s ahead.

What stands firm is its EBIT margin; specifically, a pretax profit margin gleaming at 48.3%. Such figures call to mind a diligent mariner steering through high seas with precision. Meanwhile, the revenue narrative, although fluctuating, hints at potential, painting a picture of shifting sands steadying underfoot.

When the revenue dipped, marking a downward slope, one could almost feel the collective breath held by stakeholders awaiting the next turn in the chapter. In stark contrast to clouds, the price-to-earnings ratio of 17.52 inspires cautious optimism, reflecting on Futu’s potential value as seen by its beholders.

But what about their leverage at 4? It’s like walking a tightrope; thrilling yet risky. Return on equity read at 7.39, suggesting Futu is recalibrating, much like rebalancing on a bicycle on a meandering path. Their latest financial results tell tales of a thriving asset base, comprising $71M of intangible assets and a swath of goodwill amounting to 33.58B. The essence of these figures resonates, hinting at latent value sitting under consistently tallied digits, waiting for a burst of astronomical creativity.

While these figures dance on the rim of interpretations, much like leaves rustling gently in the breeze, certain key ratios echo deeper tales – beckoning investors to ponder, speculate, or perhaps forge audacious strategies. The balance sheet glimmers with a $49B of cash and cash equivalents, illustrating a fortress-like vibe. It’s underlined by a vivid picture of $245.7 billion of total equity sprinkled with minority interests, all woven into a solid performance testament.

Navigating through these financial corridors unveils aspects such as the efficient navigation of receivables, albeit absent, quite clutch for the extensive trade winds ahead. Moreover, negative revenue streaks across three to five years bring a sobering perspective to the larger-than-life ambitions. Tension between observed attractiveness and stability lies in the heart of equity, acting like a carpet layered with robust growth prospects, expecting harvest.

An interplay between unique valuation forms – a 4.92 price-to-book measure and the tangible pricing of cash flows—is like yards of stacked probabilities itching to unwind. Return on assets, notably 1.48, tap gently on insightful ears, delivering an encore of performance summary that slides with grace across the fiscal stage. Each plays a role in spelling out Futu’s future landscape and the possible unfolding of growth stories.

The news of Tencent liquidating its stake echoes a tectonic shift. A wave of $206M flowing due to such high-premium sales leads to market chatter. While across the ocean, amidst Hong Kong’s market resilience, Futu stands bright, its flames unmasked by its swift rise in value – a deserving beacon within the brokerage realm.

Analyzing the Surge: Insights Behind the Numbers

There’s a saying that “numbers don’t lie”, and looking closely at recent events, it feels like we are witnessing a well-rehearsed performance in the financial amphitheater. BofA’s revision of Futu’s price to $90 is not just a move; rather, it’s an affirmation. An affirmation of potential, akin to opening doors, drawing in fresh air, opportunity written in metaphorical ink.

It seems the echoes of an endorsement reverberate through the realm of financial speculators and holders alike. Where numbers enlighten, conjectures emerge from behind a curtain. Adverse to the challenges springing from interest rate shifts, Futu finds the wind beneath its wings – navigating rates, handling policy interpretations with the dexterity of a seasoned artisan.

As October unfurls, Tencent’s strategic offloading of shares seems less like an ending and more the dawn of homecomings inspired by rate cuts and economic aspiration waves. The 8% leap feels like a lift descending between sky-high aspirations and the firmament of legitimate strategy.

The dance of tax cuts and the warm embrace of well-aligned asset reallocations usher in a new era, one Futu seems well-poised to embrace. A platform of precious fundamentals and prime returns maneuvers elegantly as fresh streams of market support infuse life into its prospects.

Beyond the sketched silhouette of numbers, is the resonance of investors recognizing gems hidden beneath quantifiable measures. As the company forges on, guided by its trusted benefactors, prudent investors may discover in Futu Holdings a canvas of gold – ripe for elaboration and deciphering.

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Conclusion: Navigating Uncertain Waters with Futu’s Emerging Triumph

The saga labeled Futu comprises an intricate weave of tales past, currents and fantasies untold. A world caught between risks and prospects, striving through two-fold interpretations of data, and exuding promising resilience against unexpected torrents.

With shiftings, each news pushes and drives the unfolding landscape, sketching dialogues and ensuing opportunities. Standing on the precipice of decisions, investors find themselves equipped with whirling clues, insights borne from Futu’s ride through financial highs and lows.

As the bell tolls, and echoes of market musings amplify, Futu embarks solemnly yet defiantly, charting expeditions across financial landscapes. Through storms and assured calm, the sails are unfurled – and a journey of reflection and potential fondly awaits, for the keen observer, mayhaps, has a fortune to earn from these tales.

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity.
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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”

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