Plus500 reports strong Q2, forecasts above expectations

Investing,com --  Shares of Plus500 (LON:PLUSP) rose today after the company posted a bullish forecast for its full-year results, indicating that it expects to outperform market expectations.

At 4:22 am (0822 GMT), Plus500 was trading 4.4% up at £2,538.

“Guidance increases again, which, from a conservative management team, implies high confidence in beating current consensus,” said analysts at Jefferies. The brokerage has increased its EBITDA and net income estimates by 2% and EPS by19% due to a lower share count.

The online trading platform also declared a shareholder distribution of $185.5 million. Core revenues climbed 8% year-on-year to $329 million, with total revenues reaching $398 million. The company's cash balance now stands at over $1 billion, surpassing half its market capitalization.

Customer income grew 8% to $329 million on a flat active customer count, demonstrating the strength of the core offering. 

“The quality of the customer roster is attested by a 30% increase in average deposit to $8,400 YoY and the fact that 64% of OTC revenue comes from customers of over three years on the platform,” Jefferies said. 

The upbeat outlook, coupled with the company's strong financial performance and shareholder returns, has led Jefferies to reiterate its "buy" rating on the stock. The analysts have set a target price of £28, implying an 8.1x multiple on their FY24 earnings per share.

Plus500's expanding operations in Japan and the US, along with its high distribution yield and debt-free balance sheet, are seen as key growth drivers. 

“We see potential for a re-rating as the company executes on diversification initiatives, alongside recently upsized capital returns. We also see further value creation potential from future M&A and/ or partnership agreements,” the analysts said.