Waton Financial Limited (WTF) AI Stock Analysis
WTF AI stock analysis summary
AI ResearchWaton Financial Limited (WTF) provides securities brokerage and financial technology services in Hong Kong. In FY2026, revenue increased 48.8% to $11.1M, but net losses widened to -$15.2M. Over the trailing twelve months ended June 30, 2026, the company posted a net profit margin of -149.1% with a market capitalization of $113.4M.
- Market cap
- $113.4M
- Revenue (TTM)
- $10.2M
- P/E
- —
- 1Y return
- -56.6% S&P 500 16.8%
- Avg. target
- —
Bull case
- Revenue expanded at a 4-year compound annual growth rate of 157.3% between FY2022 and FY2026, reaching $11.1M.
- The balance sheet held $10.4M in net cash as of June 30, 2026, backed by $13.0M in cash and short-term investments against $2.6M in total debt.
- The company maintained a low debt-to-equity ratio of 0.12 and a current ratio of 1.54 as of June 30, 2026.
Bear case
- Net losses expanded to -$15.2M in FY2026, contributing to a trailing twelve month net profit margin of -149.1%.
- Free cash flow fell to -$7.4M in FY2026 as operating cash flow declined to -$7.1M.
- Gross margin compressed from 75.8% in FY2023 to 22.3% in FY2026.
What Waton Financial does
Waton Financial Limited provides securities brokerage and financial technology services in Hong Kong. The company offers securities brokerage services for securities listed on the Hong Kong Stock Exchange, margin financing, bond distribution, and ancillary services through an electronic trading platform for corporate and individual brokerage clients. It also provides software licensing and related support services, including licensing and Software-as-a-Service (SaaS) delivery of trading platform applications, upgrades, and maintenance to securities brokers and financial institutions. Founded in 1989 and based in Kowloon City, Hong Kong, the company operates as a subsidiary of Waton Corporation Limited.
Growth and profitability
Revenue grew from $252,822 in FY2022 to $11.1M in FY2026, producing a 4-year revenue CAGR of 157.3%. Annual revenue rose 48.8% in FY2026 after declining 25.9% to $7.4M in FY2025. Gross margin contracted from 75.6% in FY2022 and 67.1% in FY2024 to 22.3% in FY2026. The company was profitable in FY2023 with net income of $3.1M and in FY2024 with $2.5M, before recording net losses of -$12.0M in FY2025 and -$15.2M in FY2026. Trailing twelve month revenue stood at $10.2M with an operating margin of -154.5% and quarterly revenue growth of 2.9% for the period ended June 30, 2026.
Balance sheet and cash flow
As of June 30, 2026, Waton Financial Limited held $13.0M in cash and short-term investments and $2.6M in total debt, resulting in net cash of $10.4M. Shareholders' equity was $21.7M and total assets were $54.7M. The company reported a current ratio of 1.54 and a debt-to-equity ratio of 0.12. In FY2026, operating cash flow was -$7.1M and free cash flow was -$7.4M, with capital expenditures of $323,574.
Valuation and performance
At its last close of $2.35 on October 16, 2026, Waton Financial Limited had a market capitalization of $113.4M and an enterprise value of $105.8M. The stock trades at a price-to-sales multiple of 11.2x and an EV-to-revenue multiple of 9.6x, compared to a median price-to-sales ratio of 3.2x for its US-listed Financial Services peer group. Its price-to-book ratio is 5.4x. Over the past year, the stock fell 56.6%, while the S&P 500 (SPY) returned 16.8%. The share price closed 27.2% below its 200-day average.
What analysts expect
No analyst price targets, ratings, or consensus earnings estimates are reported for Waton Financial Limited following its 2025 initial public offering. The company posted trailing twelve month diluted EPS of -$0.31 as of June 30, 2026. Ownership is concentrated, with corporate insiders holding 86.8% of shares and institutional investors owning 0.4%. Short interest accounted for 2.7% of the float as of October 16, 2026.
Key risks and what to watch
- Cash burn remains elevated, with negative free cash flow of -$7.4M in FY2026 compared to $13.0M in cash reserves as of June 30, 2026.
- The stock declined 56.6% over the prior year and closed 27.2% below its 200-day moving average.
- Insider ownership of 86.8% concentrates corporate control, while institutional investors hold 0.4%.
- The price-to-sales multiple of 11.2x trades at a premium to the US-listed Financial Services peer group median of 3.2x despite an operating margin of -154.5%.
AI-generated research summary. Written with AI from Quotelinks data as of October 16, 2026 and checked so every figure matches that data. For information only, not investment advice. Disclaimer
About this WTF AI stock analysis
This page is an AI-written research summary of Waton Financial Limited (WTF). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.
Related: WTF income statement, WTF balance sheet, WTF key metrics, WTF chart. See the WTF stock overview for the latest quote and news.
WTF AI stock analysis FAQ
What services does Waton Financial Limited provide?
Waton Financial Limited provides securities brokerage, margin financing, and bond distribution for securities listed on the Hong Kong Stock Exchange. It also provides financial technology services, including SaaS-based trading platform licensing, maintenance, and system upgrades to financial institutions.
Does Waton Financial Limited pay a dividend?
Waton Financial Limited does not pay a dividend, and no dividend distribution figures are reported.
What was Waton Financial Limited's revenue growth in FY2026?
In FY2026, revenue increased 48.8% to $11.1M, following a 25.9% decline in FY2025. Over the four years from FY2022 to FY2026, revenue grew at a CAGR of 157.3%.
What is Waton Financial Limited's cash and debt position?
As of June 30, 2026, the company held $13.0M in cash and short-term investments and $2.6M in total debt, giving it a net cash balance of $10.4M.