Assessing Plus500 Ltd’s (AIM:PLUS) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess PLUS’s latest performance announced on 30 June 2017 and evaluate these figures to its historical trend and industry movements. Check out our latest analysis for Plus500
Did PLUS beat its long-term earnings growth trend and its industry?
I look at the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to analyze various companies in a uniform manner using the most relevant data points. For Plus500, the most recent bottom-line is $163.5M, which, against last year’s figure, has moved up by a substantial 62.72%. Since these values are fairly short-term, I’ve calculated an annualized five-year value for PLUS’s earnings, which stands at $80.8M. This means generally, Plus500 has been able to steadily grow its bottom line over the past couple of years as well.
What’s the driver of this growth? Well, let’s take a look at whether it is only attributable to an industry uplift, or if Plus500 has experienced some company-specific growth. The climb in earnings seems to be propelled by a strong top-line increase overtaking its growth rate of expenses. Though this brought about a margin contraction, it has made Plus500 more profitable. Viewing growth from a sector-level, the UK diversified financial services industry has been growing, albeit, at a subdued single-digit rate of 3.84% over the past year, and a substantial 13.39% over the past five years. This shows that any near-term headwind the industry is enduring, the impact on Plus500 has been softer relative to its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Plus500 gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Plus500 to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for PLUS’s future growth? Take a look at our free research report of analyst consensus for PLUS’s outlook.
2. Financial Health: Is PLUS’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.