Hargreaves Lansdown updated investors and the wider market today with a quarterly trading update, covering the three months to end September 2021.
The update showed growth in both the number of clients and assets under administration.
Hargreaves Lansdown’s share price traded down to as low as 1479.50p this morning as the group published a scheduled trading update.
The popular retail savings, trading and investment platform attracted 23,000 new clients and £1.30 billion of new assets, that alongside capital appreciation of £1.20 billion, in the period, took the total amount of assets under administration at the group to £138.0 billion.
Hargreaves Lansdown generated revenue of £142.20 million over the quarter, £1.50 million less than in the comparable period in 2020.
Which could suggest that growth is slowing and that profit margins are beginning to tighten.
The first quarter of the company’s financial year, which this update covered has historically been a quiet period, however.
New business and inflows during this period in 2020 represented just 9.0% of the annual tally and just 14% of total new client sign-ups in 2020, were made between July and September last year.
If we conduct a Hargreaves Lansdown share price analysis, from both a technical and fundamental standpoint we find that technically the stock has been below its 50-day moving average since it gapped lower on August 9th, following the release of final results for FY 2021.
Having found support around 1400p the share price traded sideways until early October, when it began to rally, trading as high as 1529p ahead of today’s trading update.
The shooting star posted in the daily candle chart yesterday was a clue that the announcement might not be well received.
Though the sell-off at the open today looks to have been a knee jerk reaction. And though the stock is down -1.00% at the time of writing, there has been little real trading volume or follow-through.
From a fundamental perspective, Hargreaves Lansdown trades on multiple of around 26 times its estimated 2022 earnings, with a dividend yield of 3.10%.
That’s a far lower multiple than rivals AJ Bell, which is on 34 times earnings and has a lower dividend yield of just 1.83%.
Analysts have a consensus Hargreaves Lansdown share price forecast of 1619.50p and the stock is rated an overall hold.
That consensus view is made up of 3 buys, 4 holds and 4 sell recommendations.
Shore Capital who has a buy recommendation on Hargreaves Lansdown and 1900p fair value target, wrote on the company this morning saying that:
“We think investors currently have the chance to invest in one of the UK’s best businesses at a (temporarily) depressed level of profitability despite strong growth in a customer base over the last 18 months (up 30%) that will produce annuity-type revenue for the next 15 years or more.”
Though the broker recognised that founder, Peter Hargreaves, could look to sell more of his stock holding in the company going forward.
Hargreaves Lansdown will hold a capital markets day during Q1 2022, which should provide investors with a greater degree of insight into the prospects for the business.