Futu Holdings (NASDAQ:FUTU) slid in trading after the company’s lower trading volumes weighed in on its Q4 earnings. Trading volumes for the online brokerage and wealth management platform declined by 12.5% year-over-year to HK$956.6 billion due to a weak market performance.
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Trading volumes for U.S. stocks declined by 12.4% quarter-over-quarter to HK$704.6 billion mainly due to reduced turnover in key U.S. tech stocks, offset slightly by steady trading in leveraged and inverse ETFs. Moreover, FUTU’s Daily Average Revenue Trades (DARTs) fell 22.2% year-over-year to 369,729 in the fourth quarter.
The company defines Daily Average Revenue Trades (DARTs) as the number of average trades each day that generate commissions or fees.
In the fourth quarter, FUTU’s revenues increased by 4.1% year-over-year to $303.8 million but fell short of consensus estimates of $314.86 million. The company reported diluted earnings of $0.81 per American Depository Share (ADS) that exceeded Street estimates of $0.58 per ADS.
Is FUTU a Good Stock to Buy?
Analysts remain bullish about FUTU with a Strong Buy consensus rating based on three Buys and one Hold. Year-to-date, FUTU stock has gained by more than 15% and the average FUTU price target of $60.95 implies a downside potential of 6.8% at current levels.
