Futu Holdings Limited American Depositary Shares (FUTU)

FairStock Score: 72/100 — STEADY

Key Financials

Strengths

• High return on equity of 33.1% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.43, providing financial flexibility
• Healthy net profit margin of 16.1% showing consistent profitability
• Revenue growth of 45.3% demonstrates strong top-line momentum
• FairStock composite score of 76/100 places it in the top tier across value, quality, and momentum factors

Concerns

• Trades significantly above Graham Number ($91) with negative 71% margin of safety—limited downside protection
• Altman Z-Score of 0.5 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Futu Holdings Limited American Depositary Shares is a mid-cap financial services company valued at $21.7 billion. The business generates $21.1 billion in annual revenue with a 16.1% net margin. From a quality standpoint, Futu shows distressed Altman Z-Score of 0.5 warrants caution and strong 33% ROE. On valuation, the stock is reasonably priced at 15.1x earnings, with trades above its Graham Number with a negative 71% margin. Growth dynamics show revenue growing at 45.3% and profit growth of 81.1%. The 1.6% dividend yield adds an income component for patient holders. Our composite FairStock Score of 76/100 reflects strong fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Futu's 45% revenue growth trajectory could accelerate as it captures additional market share in the financial services sector. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the financial services space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer