Plus 500’s share price rose by more than +5.0% this morning as the company issued a positive trading update that covered the three months to the end of September 2021.
Plus 500 shares traded as high as 1464.50p before drifting back to 1451p, compared to their prior close at 1380p.
Unlike their listed peers, IG Group (read our IG review) and CMC Markets (read our CMC Markets review), Plus 500 (read our Plus 500 review) were able to raise guidance for full-year 2021, and that it expected revenues and EBITDA to be ahead of the levels forecast at the time of the first half result in Mid August.
Plus 500 has seen what it called
“further positive momentum during Q3 2021, despite more stable market conditions when compared to recent quarters.”
That momentum was driven by consistent strength in customer income and continued growth in the size of the Plus 500 client base.
Plus 500 added 136,980 new customers in the first half of 2021 and saw an average revenue per user of $1037.00 in that period.
The growth in client numbers was attributed to the companies investment in marketing technology that has delivered an attractive return-on-investment, and which is likely to drive further platform engagement in the future.
Plus 500 will publish its Q3 2021 results, for the period ended 30 September 2021, on 25 October.
Technically the Plus 500 share price of 1451p has taken the stock out of a recent downtrend, back above its 20,50 and 200-day moving averages, and well into a gap in the daily candle chart at 1466p, which was left behind on September 1st.
If we are to see continued follow-through in the stock price it will need to close that gap and ideally re-establish itself above that level.
Once that’s is accomplished then there may be scope for a move back above 1500p, the recent highs circa 1528p, and perhaps even the 17th of August high at 1556p.
From a fundamental standpoint Plus 500 trades on a trailing 12 month PE of 5.56 times earnings, a price to sales ratio of 2.95 times, and a price to book value of 3.14 times.
None of which is demanding if you view the company as a growth business with Fintech credentials, rather than as just a margin trading brokerage.
The stockbrokers that research the company have a consensus share price forecast, for Plus 500, of 1569.50p just over £1 higher than the current stock price of 1451p.
The consensus view on the stock is a hold however that’s comprised of one buy, one sell and two hold ratings, among the four analysts that cover the stock.
One of those brokers, Liberum, wrote on the stock today, though they did not adjust their forecast or price target, having aggressively upgraded both in the wake of Plus 500’s first-half results back in August.
Liberum did reiterate their buy recommendation and 2200p price target saying that:
“Since announcing its updated strategy, the group continues to make further progress on delivering against its vision to evolve into a global multi-asset fintech group.”
“This progress has been driven by further investment in Plus500’s market-leading proprietary technology platform, its acquisition of Cunningham Commodities (a US-based futures broker) and the launch of ‘Plus500 Invest’, the Company’s new share dealing platform.”
All eyes on the 25th of October then.
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