On Tuesday, JPMorgan maintained its Overweight rating on Futu Holdings Limited (NASDAQ: NASDAQ:FUTU) stock with a steady price target of $92.00. The brokerage firm acknowledged a mixed performance in the company's first-quarter results for 2024, highlighting robust new client growth as a positive outcome.
Despite this, there was a notable 13% year-over-year decline in net profit, which fell short of JPMorgan's own estimates and Bloomberg consensus estimates by 7% and 5%, respectively.
The comparison to the first quarter of 2023 is significant as it was a particularly strong period for the market, buoyed by the reopening trade in China.
However, the benefits of an increase in high-paying clients and the rally of China ADRs are expected to be more apparent in the second-quarter results rather than those of the first quarter.
The firm's focus now shifts to Futu's upcoming management guidance, which will cover topics such as client growth, trading volume expectations, and new product launches. This guidance will be discussed during the company's briefing call, which is scheduled for 7.30pm Hong Kong Time.
JPMorgan's stance is that if the management's guidance aligns with the sentiments expressed at their China Summit, any potential dip in Futu's share price following the results could present a buying opportunity for investors.
The firm looks forward to gaining further insights from Futu's management during the call to better assess the company's trajectory and operational strategies moving forward.
InvestingPro Insights
In light of JPMorgan's assessment of Futu Holdings Limited (NASDAQ: FUTU), recent data and analysis from InvestingPro offer additional insights. Trading at a P/E ratio of 19.08, the company appears to be valued attractively relative to its near-term earnings growth. This aligns with the InvestingPro Tip that Futu is trading at a low P/E ratio considering its growth potential. Furthermore, the company has demonstrated a high return over the last year, with a 94.4% price total return, underscoring the strength of its stock performance.
The company's robust revenue growth, as evidenced by a 24.26% increase over the last twelve months as of Q4 2023, coupled with a high gross profit margin of 93.12%, suggests a strong underlying business model. Additionally, with an impressive operating income margin of 55.04%, Futu's profitability metrics are solid. These factors are likely to be key points of interest in the upcoming management guidance and may influence investor sentiment.
Investors seeking a deeper dive into Futu's financial health and future prospects can access more InvestingPro Tips, with a total of 9 tips available at https://www.investing.com/pro/FUTU. For those considering an InvestingPro subscription, use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering a comprehensive suite of tools and insights for informed investment decisions.
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