Israeli online contract-for-difference (CFD) platform Plus500 (LSE: PLUS) has seen its share price rise 70% over the past year and it is currently trading on the main London Stock Exchange at an all-time high. Last week the company published two positive reports: its financial results for 2024 and that its stock is now listed on the STOXX Europe 600 Index. It joined the index on Friday and this is likely to increase trading in the share and demand for the stock from investors following the index and Exchange Traded Funds (ETFs) related to it.
Plus500, which operates worldwide, offers an online trading platform using a series of financial tools, mainly CFD's on the prices of various securities - stocks, commodities, foreign exchange, digital currencies, and more. This is done by purchasing a leveraged contract on the underlying value, which guarantees the rate of increase/decrease in the paper price.
Plus500, managed by CEO David Zruia, is traded in London at a market cap of £2.1 billion (NIS 9.1 billion). The company benefits when volatility increases as it allows users of the platform to purchase a CFD on securities or any currency, and charges commissions on the difference between the purchase and sale prices.
The STOXX Europe 600 index, which Plus500 has joined includes 600 European stocks from various exchanges, which according to the index operators offers extensive coverage of 90% of the market. In addition to large-cap stocks, it also includes mid-cap and small-cap stocks, with listed stocks that have high liquidity and an average daily trading volume of over €1 million.
In Plus500's announcement about its inclusion in the index, it noted that since its IPO in London in 2013, the company has returned $2.3 billion to investors, and that it has a strong balance sheet with cash reserves of about $900 million and no debt, as of the end of 2024.
Zruia said, "Plus500’s inclusion in the STOXX Europe 600 Index for the first time is a significant milestone for the Group and serves as an important recognition for the compounding value creation we have delivered in recent years. With the Group’s robust fundamentals, disciplined approach to capital allocation and strong cash generation, we look forward to continuing to execute against our strategic roadmap objectives and to delivering attractive and sustainable returns for our shareholders."
"The market is undervaluing"
Plus500 last week provided preliminary results for 2024. Revenue was $768 million and EBITDA $342 million, with 36,000 new customers joining during the fourth quarter alone.
On 2025, the company said it "Remains well positioned to continue executing in line with strategy, developing new products and deepening customer engagement, which will in turn lead to growth and shareholder value."
Investment bank Kantor Fitzgerald has given Plus500 an "outperform" recommendation and a target price of 3,260p, which is a 12.8% premium on its current price. Last week, the bank’s analyst Edward James wrote that with $900 million in cash, they expect the company to announce a significant return to shareholders. "We think the market continues to underestimate the evolution of the business," James wrote, "and has difficulty understanding its technology advantage over competitors."
Published by Globes, Israel business news - en.globes.co.il - on January 20, 2025.
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