Plus500 Ltd (LSE:PLUS)’s house broker Liberum has come out swinging for the online trading platform following today’s first-quarter trading update.
“Plus500 continues to trade well, delivering another excellent financial performance, reflecting a business model built on a unique, proprietary tech stack which delivers customer acquisition and retention,” said an analyst team led by Nick Anderson.
Revenues for the main market-listed group grew 64% quarter on quarter with underlying EDITA growing 116% on a 49% margin compared to a 37% margin in the previous quarter.
New customers grew 10% to 28,200 while active customers grew 5% to 137,000. Average revenue per user ratcheted up 57%, with Liberum analysts pointing out “continued investment in a diversified marketing approach”.
Strong cash generation was a boon for Plus500 shareholders, with the company buying back nearly US$50mln (£40mln) in shares as part of a US$70mln programme.
Even with the buybacks, cash balances increased from US$930mln at full-year 2022 to US$950mln as of March 31, 2023.
Liberum issued a buy rating with a 3,100 target price, representing an 83% upside against the publication price of 1,686p.