IG group recently updated the market on its first-quarter revenues, in the financial year 2022. That covered the period to the 31st of August 2021.
The IG Share price moved higher today as IG reported revenues of £227.50 million and adjusted net trading revenue of £221.7 million.
A figure that was above both the comparable numbers in the same period last year, as well as the numbers seen in the previous quarter. Perhaps most importantly of all the figures were in line with the company’s guidance to investors.
The revenue figures were flattered slightly, by the inclusion of the recently acquired TastyTrade business, and when that contribution was stripped out net trading revenue for the quarter was down by -4.0% at £200.90 million.
IGs Active client numbers (excluding TastyTrade) have risen over the first quarter of FY 2022 and are up by+12% to 225,900.
The revenue and client numbers are in sharp contrast to the profits warning, issued by rivals CMC Markets, in the first week of September.
At the current share price of 812p IG shares are down by – 5.97% over the year to date. The stock traded to a new 5 year high of 960p in late April a level that was less than 8p below the all-time high of 967.64p, posted in August 2016.
IG stock sold off in sympathy with CMC shares, on the back of the latter’s profit warning, breaking below its 20,50 and 200 day moving averages as it did so.
What’s more in the days following the sell-off the 20 day MA line formed a dead cross with both the 50 and 200-day moving averages in turn. A signal that confirmed the negative price momentum in the stock.
The RSI 14 reading for IG Group stock touched the oversold boundary of 30, shortly after the 20 and 200-day moving average intersected, as the stock gapped lower, between the 22nd and 23rd of the month.
From a fundamental perspective, IG Group is trading on a price to book ratio of 3.04 times and a price to sales ratio of 3.44 times. Its 12-month trailing pe ratio is an undemanding 7.98 times earnings according to data from Barchart, All of which suggests that IG shares could be considered cheap.
RBC Capital Markets has published a research note on the company today in which they modestly upgraded their earnings forecasts and reiterated their 1075p price target, and outperform rating.
“We continue to believe that the unique conditions presented by the COVID-19 pandemic will lead to a longer legacy of profitability for IGG. Additionally, the stock currently trades at a PE of 11.2 times for FY 2022, a discount to its 5-year PE average of 14.0x. Despite its strong short- to medium-term prospects.”
The consensus among all the analysts that follow IG Group is that the shares are a buy with a price target of 1119p, with Barclays being the most bullish broker with a 1185p price target, whilst Canaccord, who have the sole sell recommendation on the stock, has a target price of 519p.
Darren is a veteran of the financial markets with almost 36 years of experience under his belt. He has worked in trading, sales, analytical, and research roles, he has been a regular guest & commentator on financial television channels and publications. During his career, Darren has been fortunate to act for and advise major hedge funds and investment banks as well as HNWI. Darren analyses the markets using a blend of technical and fundamental analysis