Shares of Plus500 (LON:) rose today after the company posted a bullish outlook for its full-year results, suggesting it expects to beat market expectations.
At 4:22 a.m. (0822 GMT), Plus500 shares were up 4.4% at £2,538.
“Expectations are up again, which suggests a strong management team with high confidence in beating the current consensus,” Jefferies analysts said. The company raised its EBITDA and net income estimates by 2% and EPS by 19% due to lower share counts.
The online trading platform also announced a dividend of $185.5 million to shareholders. Core revenue rose 8% year-over-year to $329 million, with total revenue reaching $398 million. The company’s cash balance now stands at more than $1 billion, more than half its market cap.
Client revenue increased 8% to $329 million on a constant number of active clients basis, demonstrating the strength of the underlying offering.
“The quality of the client roster is evident in the 30% increase in average deposit to $8,400 year-over-year and the fact that 64% of OTC revenue comes from clients who have been on the platform for more than three years,” Jefferies said.
The upbeat outlook, coupled with the company’s strong financial performance and shareholder returns, has prompted Jefferies to reaffirm its “buy” rating on the stock. Analysts have set a price target of £28, implying a multiple of 8.1x their FY24 earnings per share.
Plus500’s expanding operations in Japan and the US, coupled with a high dividend yield and debt-free balance sheet, are key drivers of growth.
“We see potential for a reclassification as the company implements diversification initiatives, coupled with recently increased capital returns. We also see greater potential for value creation through future M&A and/or partnership deals,” the analysts said.
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