Webull's stock took a beating this week, falling 19% after a congressional report criticized the company's ties to China. On Friday, a Scotiabank analyst indicated the stock is a buy at current levels and said the company's remedies for addressing congressional concerns may not be that onerous.
Lance Jessurun upgraded Webull stock to Sector Outperform from Sector Perform, writing that most likely remedies carry minimal risk to either financial results or the stock. "At the current valuation, the margin of safety is too wide to ignore," Jessurun writes.
Webull's stock was up 4.3% Friday morning at $6.26. Jessurun's price target for Webull shares is $9. The benchmark S&P 500 index was up 0.3%. Shares of the brokerage firm have struggled this year and are down 20% compared with a 14% gain for the S&P 500.
The bipartisan report from the House Select Committee on China, issued Wednesday, said that the brokerage firm's ties to China pose legal and surveillance risks to American investors. Webull's regulatory controls were weaker than its assurances suggested and the company misrepresented where key employees worked and how they were supervised, the report said.
Jessurun, the Scotiabank analyst, says the committee's report is about the company's structure and doesn't allege any data breach. In addition, he notes, the committee has little power over Webull. F, for example, it can't order Webull's stock to be delisted or order the company to divest business units.
"We ultimately think it's highly unlikely that this administration spends political capital on a $3 billion market cap broker while it is negotiating with Beijing on trade," he writes. "Even more likely is the chance that the bipartisan commission is dissolved after midterms."
On Thursday, Webull said the report misrepresented its operations and said the committee didn't give the company an opportunity to respond to the findings before publication. Webull also said information about its corporate ownership and China-based technology team have already been disclosed to investors, regulators, and the public.
"The report draws sweeping conclusions about Webull from an incomplete record, and it gets important facts wrong," a Webull representative said in a written statement.
Webull says it supports the committee's recommended actions for improving U.S. financial regulatory frameworks. The report recommended a set of regulatory changes that it said would strengthen oversight and protect Americans' data and information, such as stricter in-person regulatory exams.
The report comes amid rising tensions between the U.S. and China over trade, cybersecurity, and other issues.
Webull was founded by Chinese businessman Anquan Wang in 2016. The brokerage firm, which operates in 18 markets, rose in popularity during the meme stock craze and has been recently trying to win active traders. It went public via a SPAC deal in 2025. Webull's parent company is based in the Cayman Islands.
The likely remedies to resolve the committee's concerns are "cheap," Jessurun writes. He estimates that relocating the subset of China-based Webull employees who may touch U.S. data or production systems wouldn't cost more than $10 to $15 million a year. A U.S.-only data environment with an independent monitor likely wouldn't cost more than $10 million a year, he finds.
The analyst says that Webull's business is growing at a strong clip, noting that second-quarter revenue came in at $199 million and were up 51% year-over-year.
Webull, Robinhood Markets, Interactive Brokers, and other brokerage firms have been benefiting from a surge in retail investor activity that has pushed up trading volumes and margin loans.
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