Highlights:

• Freedom Holding Corp had net income has risen to $47.83 million, more than double the $22.1 million it earned in all of fiscal 2019
• Total Revenue increase in the 3 quarter of 2020 by 111.31% year on year
• The DCF analysis shows that the FRHC stock forecast should be around $70.79.

Overview

Freedom Holding Corp is a corporation organized in the United States under the laws of the State of Nevada. It owns several operating subsidiaries that engage in a broad range of activities in the securities industry. The company includes retail securities brokerage, research, investment counseling, securities trading, market making, corporate investment banking, and underwriting services in Central Asia. Freedom Holding Corp is headquartered in Almaty, Kazakhstan, with supporting administrative office locations in Russia, Cyprus, and the United States. Freedom Holding Corp is a professional participant on the Kazakhstan Stock Exchange (KASE), Moscow Exchange (MOEX), Saint-Petersburg Exchange (SPB), the Ukrainian Exchange, and the Republican Stock Exchange of Tashkent (UZSE). FRHC is the fastest-growing financial services company on Earth. FRHC stock forecast has a positive trend for investors.

FRHC is one of the fastest-growing financial services companies

In the first six months of its financial year that ends on March 30, FRHC’s net income rose to $47.83 million. Nearly triple what it reported for the same period a year ago – and more than double the $22.1 million it earned in all of fiscal 2019. According to ffj-online.org, in 2019, it generated $81k in revenue for each of its 1,343 full- and part-time employees. In 2018 that figure was $65k for every one of its 1,141 employees. Figure 1 shows that, currently, the short-term moving average is above the long-term moving average.

In agreement with simplywall.st, FRHC has high-quality earnings. Current net profit margins (33.3%) are higher than last year’s (29%). Profit margins and overall demand for services could decline due to many factors beyond companies control. FRHC shares are up more than 30.1% since the beginning of 2020. COVID-19 caused the increase in FRHC stock price in 2020, economic recessions, changes in customer preferences, investor and consumer confidence, inflation, availability of credit, fluctuation in interest, and currency exchange rates.

From figure 3, we can see that all financial ratios increased in 2020. ROI shows the probability of gaining a return from an investment of 12% in 2020. ROE and ROA indicators are above the industry average (the industry average is 11.3% and 2.3 % ). 

We can see that from figure 4: FRHC’s short term assets ($1.0B) exceed its short term liabilities ($818.6M). Companies short term assets ($1.0B) exceed its long term liabilities ($82.2M). This indicates the high liquidity of the company.

Overall, it may be said that the company has positive financial results: high-quality earnings and liquidity. The financial ratios tell us about the efficiency of a company’s management and the investments, profitability of the business concerning equity.

FRHC stock forecast: Total Revenue increase in Q3 2020 by 111.31%

Compared to its competitors, Freedom Holding reported a total revenue increase in the 3 quarter of 2020 by 111.31 % year on year. To compare Freedom Holding Corp to the investment services industry, let’s take competitors such as Futu Holdings Limited (FUTU) and Stifel Financial Corp.(SF). Freedom Holding Corp’s market capitalization is 1.4 times higher than FUTU and is 2.04 lower than SF.

From key financial indicators, we can conclude that FRHC has positive results in all indicators against competitors’ background. Freedom Holding Corp is inferior only in terms of net income. It may be related to covid-19, according to the company’s 2020 financial statements. Covid-19 had a significant adverse impact on our financial condition and operations results during the period ended March 31, 2020.

The financial Ratios of Freedom Holding Corp are higher than competitors. This speaks of the efficiency of a company’s management and investments.

All in all, we can conclude that the company has high results to its competitors in terms of cash flow, revenue, and annual earnings growth. The financial Ratios talk about the efficiency of a company’s management and the investments, profitability of the business concerning equity. Freedom Holding’s income statements imply that its management can spend 36.72 % to realize a return of $1 in just a few months, all without having to sell stock or take on a mountain of debt. It allows being on the buy-side on FRHC’s stock.

The Role of the Subsidiary for FRHC Stock Forecast

As reported by ffj-online.org, over 2019, the subsidiary earned $33.80 million, more than fiscal 2018’s $11.9 million. As the figure below shows, Freedom Finance Cyprus Limited’s total 2019 income was far greater than Freedom Holding’s other subsidiaries’ combined incomes. Therefore, the main factor in determining the FRHC’s shares’ value will be played by the Freedom Finance Cyprus activities. The dynamics of the US indexes S&P500 and Dow Jones determine the mood on the other stock markets globally, including Russia. Freedom Finance Cyprus monitors the situation on the stock exchanges NYSE, NASDAQ, CME, CBOT, and others, and repeats their main trends. The FRHC’s share price will depend on the state of these markets. According to the analytical forecast for NYSE, NASDAQ, CME, CBOT, S&P500 expect to see a continuation of the uptrend. Consequently, the growth of these markets will contribute to the growth of the FRHC’s shares in the future and will be a signal to buy shares.

DCF Supports $71 FRHC Stock Forecast for 2021

The forecast is based on average data from previous years, the direction of the company’s policy, and the specifics of the development of this sector of the economy for the coming years. Future cash flows are projected based on historical data combined with a forecast for the next 4 years. The DCF analysis results show that FRHC’s stock target price should be around $70.79.  This projected share price makes 19.09% more difference from the current share price.

Conclusion:

I take the buy-side on FRHC’s stock because stock holds buy signals from both short and long-term moving averages giving a positive forecast. FRHC shares are up more than 30.1% since the beginning of 2020.  FRHC had net income rise to $47.83 million, nearly triple what it reported for the same period a year ago – and more than double the $22.1 million it earned in all of fiscal 2019. Total Revenue increase in the 3 quarter of 2020 by 111.31 % year on year, while most of its competitors have experienced a contraction in revenues by -30.67 %. Therefore, I consider it a good choice at these current levels, and according to the DCF analysis results, FRHC’s stock target price should be 19.09% more and will be around $70.79.

It is worth paying attention that I Know First’s stock-picking AI has an extreme signal on the one-year market trend forecasts, supporting my position for the FRHC stock forecast. The light green for the short-term forecasts is mildly bullish, while the darker green is a strong bullish signal for the one-year forecast.

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Please note-for trading decisions use the most recent forecast.