- Oops!Something went wrong.Please try again later.
Shareholders in Futu Holdings Limited (NASDAQ:FUTU) may be thrilled to learn that the analysts have just delivered a major upgrade to their near-term forecasts. The analysts have sharply increased their revenue numbers, with a view that Futu Holdings will make substantially more sales than they'd previously expected. Investors have been pretty optimistic on Futu Holdings too, with the stock up 47% to US$102 over the past week. Could this upgrade be enough to drive the stock even higher?
After the upgrade, the five analysts covering Futu Holdings are now predicting revenues of HK$4.7b in 2021. If met, this would reflect a huge 105% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing HK$4.2b of revenue in 2021. It looks like there's been a clear increase in optimism around Futu Holdings, given the nice increase in revenue forecasts.
The consensus price target rose 47% to HK$593, with the analysts clearly more optimistic about Futu Holdings' prospects following this update. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Futu Holdings, with the most bullish analyst valuing it at HK$120 and the most bearish at HK$48.00 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Futu Holdings' growth to accelerate, with the forecast 105% growth ranking favourably alongside historical growth of 58% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.8% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Futu Holdings is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away from this upgrade is that analysts lifted their revenue estimates for next year. They're also forecasting more rapid revenue growth than the wider market. There was also an increase in the price target, suggesting that there is more optimism baked into the forecasts than there was previously. Seeing the dramatic upgrade to next year's forecasts, it might be time to take another look at Futu Holdings.
Looking for more information? At least one of Futu Holdings' five analysts has provided estimates out to 2022, which can be seen for 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.