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Analysts Just Made A Massive Upgrade To Their Futu Holdings Limited (NASDAQ:FUTU) Forecasts

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Futu Holdings Limited (NASDAQ:FUTU) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the latest consensus from Futu Holdings' eight analysts is for revenues of HK$7.1b in 2021, which would reflect a major 129% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 137% to HK$24.24. Previously, the analysts had been modelling revenues of HK$5.2b and earnings per share (EPS) of HK$15.46 in 2021. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

View our latest analysis for Futu Holdings

earnings-and-revenue-growth
earnings-and-revenue-growth

With these upgrades, we're not surprised to see that the analysts have lifted their price target 31% to HK$1,433 per share. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Futu Holdings at HK$255 per share, while the most bearish prices it at HK$47.91. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Futu Holdings' past performance and to peers in the same industry. It's clear from the latest estimates that Futu Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 129% annualised revenue growth to the end of 2021 noticeably faster than its historical growth of 65% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.9% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Futu Holdings to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Futu Holdings.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Futu Holdings going out to 2025, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.