Israeli based margin trading broker Plus500 updated the market on trading today with a year-end update that covered the period to the 31st of December 2021.
What did Plus500’s update contain?
Full-year revenue at the company came in at approximately $718.0 million with Q4 2021 accounting for around $160.0 million of the annual figure.
Revenue from Plus500’s client base made up the vast majority of 2021 revenues, generating some $702.0 million.
That figure was driven by a “consistently high level of customer trading activity throughout the year”.
The customer base remained well ahead of pre-covid levels at 406,000 the company added 196,150 new customers in 2021, 33,000 of those joined in Q4.
Is Plus500 expanding?
Plus500 is in the process of integrating Cunningham Trading Systems LLC, a US futures broker it recently acquired.
The purchase of which provides a platform to launch services for US customers, though under current legislation US retail customers are barred from trading in leveraged OTC derivatives.
However, the company is offering on-exchange futures and options trading and has launched a dedicated share trading platform Plus500 Invest, which was developed in house.
Part of a strategy aimed at diversifying its income streams and repositioning the group into the fintech space and out of pure broking.
Plus500 stock gapped higher on the open following the release of the trading update and printed as high as 1487.50p as I write the stock is up 2.78%.
Part of a 5-day rally that has seen the stock appreciate by +8.49%, and over the last month, Plus500 shares are up more than +15.50%.
During that time frame, the share price posted 13 new highs.
This suggests that the market was expecting good things from Plus500 but that much of today’s news was already priced in by investors.
What did the market think of the trading update?
Stockbroker Liberum published a note on Plus500 with the headline outstanding performance driven by continued technology investment.
They rate the stock as a buy and have a 2200p target price which is more than 700p above the current levels and almost 200p above the 5- year high for the stock.
Liberum noted that Q4 21 revenues of circa $160.0 million were +106.0% ahead of their own expectations and, that full-year revenues were +13.0% ahead of their estimates.
They added that:
“Plus500 has made excellent progress in FY21 on its strategic roadmap to develop its position as a global multi-asset fintech group which has been primarily been driven by ongoing investment in Plus500’s market-leading proprietary CFD technology platform”
Liberum also highlighted the ongoing share buyback as a source of share price appreciation, noting that since 2017 the company has bought 14.80 million of its own shares, which equates to 14.80% of the company, at a cost of $220.0 million.
Plus500s market cap is currently $1.44 billion.