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BofA Initiates Buy For Futu Holdings On Growth Momentum

BofA Initiates Buy For Futu Holdings On Growth Momentum

Futu Holdings Ltd (NASDAQ: FUTU) provides a comprehensive online financial services platform that is expanding to capture investment demand from more countries, according to BofA Securities.

The Futu Holdings Analyst: Emma Xu initiated coverage of Futu Holdings with a Buy rating and a price target of $195.

The Futu Holdings Thesis: Although the company generated a 95% compounded annual growth rate in paying clients between 2016 and 2020 to 517,000, this represents merely 4.3% of its user base, Xu said in the initiation note.

The analyst mentioned 5 reasons for the Buy rating:

  • The company’s fast-growing client base and large addressable market
  • Operating leverage it has from cross-selling opportunities and economies of scale
  • Technology leadership given its “first-mover advantage, Tencent’s support and continued R&D investments”
  • Increased user engagement and retention from its social community
  • “Upside from U.S. self-clearing system in the near term and wealth management platform in the medium term.”

“We forecast EPS to grow at 57% CAGR in 2020-23E. Our 2021E earnings are based on 700k new paying clients, and QoQ decline in average assets per client and trading velocity,” she further wrote.

FUTU Price Action: Shares of Futu Holdings had risen by 0.69% to $144.80 at the time of publication Monday.

(Photo: Scott Graham via Unsplash)

Latest Ratings for FUTU

Apr 2021B of A SecuritiesInitiates Coverage OnBuy
Mar 2021CitigroupMaintainsBuy
Feb 2021CitigroupMaintainsBuy

View More Analyst Ratings for FUTU
View the Latest Analyst Ratings


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