Research on Plus500 Ltd (DI) (PLUS) from Sidoti & Company
We estimate 2Q:F27 revenue grew 5% year over year to $639.3 million and EPS (including stock compensation expense) declined nearly 5% to $1.38. PLUS is facing a tough comparison with 2Q:F26 and, with longer lead times, the demand PLUS is seeing is not currently translating to revenue. However, the company is building a sizable backlog that will become a significant tailwind as memory constraints ease. Despite the supply headwinds, we still think PLUS is well positioned for growth as AI is driving increased enterprise spending on the cloud, data centers, networking and security, all areas of expertise for PLUS. ePlus ended 1Q:F27 with no debt and cash of $449 million ($17.22 per share), giving the company ample flexibility to invest organically, pursue additional tuck-in acquisitions, more actively buy back stock, and continue to increase its dividend. We maintain our $111 price target based on about 18x our F2028 EPS estimate of $6.09. Given the company's track record of profits and a debt-free balance sheet, we assign the stock a Moderate risk rating.
View Full ResearchDisclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.
