IG Group Holdings (LSE:IGG) - Share price, News & Analysis

Q: What is the Fair Price of IGG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

IGG (£6.78) is trading below our estimate of [[fair value]] (£28.47)

IGG fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	3/6
Financial Health	4/6
Dividends	6/6

IGG Stock Overview

IG Group Holdings plc engages in the online trading business worldwide.

Rewards

Trading at 76.2% below our estimate of its fair value

Revenue is forecast to grow 7.02% per year

Earnings have grown 17.7% per year over the past 5 years

Pays a high and reliable dividend of 6.37%

Risk Analysis

Earnings are forecast to decline by an average of 8.4% per year for the next 3 years

IG Group Holdings Competitors

AJ Bell

LSE:AJB

UK£1.1b

CMC Markets

LSE:CMCX

UK£774.7m

TP ICAP Group

LSE:TCAP

UK£829.0m

Alpha FX Group

AIM:AFX

UK£708.9m

Price History & Performance

Summary of all time highs, changes and price drops for IG Group Holdings
Historical stock prices
Current Share Price	UK£6.78
52 Week High	UK£10.05
52 Week Low	UK£6.47
Beta	0.50
1 Month Change	-6.03%
3 Month Change	-17.72%
1 Year Change	-21.80%
3 Year Change	15.27%
5 Year Change	23.27%
Change since IPO	466.18%

Shareholder Returns

	IGG	GB Capital Markets	GB Market
7D	-2.7%	-1.7%	-2.7%
1Y	-21.8%	-18.5%	-10.6%

Return vs Industry: IGG underperformed the UK Capital Markets industry which returned -20.1% over the past year.

Return vs Market: IGG underperformed the UK Market which returned -10.9% over the past year.

Price Volatility

Is IGG's price volatile compared to industry and market?
IGG volatility
IGG Average Weekly Movement	3.8%
Capital Markets Industry Average Movement	4.2%
Market Average Movement	5.3%
10% most volatile stocks in GB Market	10.6%
10% least volatile stocks in GB Market	2.8%

Stable Share Price: IGG is less volatile than 75% of UK stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: IGG's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1974	2,424	June Felix	https://www.iggroup.com

IG Group Holdings plc engages in the online trading business worldwide. The company offers Over-the-counter (OTC) leveraged derivatives, which include CFD (contracts for difference) that enable clients to take advantage of changes in an asset’s price without owning the asset itself, as well as access to a range of risk-mitigation measures, including stops and limits and a limited risk account; and spread bets and options. It also provides exchange-traded derivatives under the tastytrade, an online brokerage and investor education platform; Nadex, a US derivatives exchange; and Spectrum, a multilateral trading facility.

IG Group Holdings Fundamentals Summary

How do IG Group Holdings's earnings and revenue compare to its market cap?
IGG fundamental statistics
Market Cap	UK£2.92b
Earnings (TTM)	UK£390.20m
Revenue (TTM)	UK£915.40m

7.5x

P/E Ratio

3.2x

P/S Ratio

Is IGG overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
IGG income statement (TTM)
Revenue	UK£915.40m
Cost of Revenue	UK£349.50m
Gross Profit	UK£565.90m
Other Expenses	UK£175.70m
Earnings	UK£390.20m

Last Reported Earnings

Nov 30, 2021

Next Earnings Date

Jul 21, 2022

Earnings per share (EPS)	0.91
Gross Margin	61.82%
Net Profit Margin	42.63%
Debt/Equity Ratio	17.1%

How did IGG perform over the long term?

See historical performance and comparison

Dividends

6.4%

Current Dividend Yield

44%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is IGG undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for IGG?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for IGG. This is calculated by dividing IGG's market cap by their current preferred multiple.
What is IGG's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£2.92b

IGG key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	-0.9x

Price to Earnings Ratio vs Peers

How does IGG's PE Ratio compare to its peers?

IGG PE Ratio vs Peers

The above table shows the PE ratio for IGG vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	58.9x
AJB AJ Bell	28.8x	14.9%	UK£1.1b
CMCX CMC Markets	10.8x	-4.2%	UK£774.7m
TCAP TP ICAP Group	165.8x	62.2%	UK£829.0m
AFX Alpha FX Group	30.1x	n/a	UK£708.9m
IGG IG Group Holdings	7.5x	-8.4%	UK£2.9b

Forward PE

Price-To-Earnings vs Peers: IGG is good value based on its Price-To-Earnings Ratio (7.5x) compared to the peer average (58.9x).

Price to Earnings Ratio vs Industry

How does IGG's PE Ratio compare vs other companies in the GB Capital Markets Industry?

Price-To-Earnings vs Industry: IGG is good value based on its Price-To-Earnings Ratio (7.5x) compared to the UK Capital Markets industry average (9.5x)

Price to Earnings Ratio vs Fair Ratio

What is IGG's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

IGG PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.5x
Fair PE Ratio	14.8x

Price-To-Earnings vs Fair Ratio: IGG is good value based on its Price-To-Earnings Ratio (7.5x) compared to the estimated Fair Price-To-Earnings Ratio (14.8x).

Share Price vs Fair Value

What is the Fair Price of IGG when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: IGG (£6.78) is trading below our estimate of fair value (£28.47)

Significantly Below Fair Value: IGG is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: IGG's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is IG Group Holdings forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-8.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: IGG's earnings are forecast to decline over the next 3 years (-8.4% per year).

Earnings vs Market: IGG's earnings are forecast to decline over the next 3 years (-8.4% per year).

High Growth Earnings: IGG's earnings are forecast to decline over the next 3 years.

Revenue vs Market: IGG's revenue (7% per year) is forecast to grow faster than the UK market (4.2% per year).

High Growth Revenue: IGG's revenue (7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: IGG's Return on Equity is forecast to be high in 3 years time (25.5%)

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Past Performance

How has IG Group Holdings performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

17.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: IGG has high quality earnings.

Growing Profit Margin: IGG's current net profit margins (42.6%) are lower than last year (42.8%).

Past Earnings Growth Analysis

Earnings Trend: IGG's earnings have grown by 17.7% per year over the past 5 years.

Accelerating Growth: IGG's earnings growth over the past year (14%) is below its 5-year average (17.7% per year).

Earnings vs Industry: IGG earnings growth over the past year (14%) underperformed the Capital Markets industry 43.8%.

Return on Equity

High ROE: IGG's Return on Equity (22.4%) is considered high.

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Financial Health

How is IG Group Holdings's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: IGG's short term assets (£1.5B) exceed its short term liabilities (£666.5M).

Long Term Liabilities: IGG's short term assets (£1.5B) exceed its long term liabilities (£388.8M).

Debt to Equity History and Analysis

Debt Level: IGG has more cash than its total debt.

Reducing Debt: IGG's debt to equity ratio has increased from 7.3% to 17.1% over the past 5 years.

Debt Coverage: IGG's debt is well covered by operating cash flow (207.1%).

Interest Coverage: Insufficient data to determine if IGG's interest payments on its debt are well covered by EBIT.

Balance Sheet

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Dividend

What is IG Group Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

6/6

Dividend Score 6/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

6.37%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: IGG's dividend (6.37%) is higher than the bottom 25% of dividend payers in the UK market (1.93%).

High Dividend: IGG's dividend (6.37%) is in the top 25% of dividend payers in the UK market (5.3%)

Stability and Growth of Payments

Stable Dividend: IGG's dividends per share have been stable in the past 10 years.

Growing Dividend: IGG's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (43.8%), IGG's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (31.1%), IGG's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure

CEO

June Felix (66 yo)

3.75yrs

Tenure

UK£3,544,000

Compensation

Ms. June Yee Felix serves as Non-Executive Director at RELX PLC since October 15, 2020. She has been the Chief Executive Officer and an Executive Director at IG Group Holdings plc since October 30, 2018. M...

CEO Compensation Analysis

Compensation vs Market: June's total compensation ($USD4.22M) is above average for companies of similar size in the UK market ($USD3.01M).

Compensation vs Earnings: June's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: IGG's management team is considered experienced (3.4 years average tenure).

Board Members

Experienced Board: IGG's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: IGG insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/06 00:00
End of Day Share Price	2022/07/06 00:00
Earnings	2021/11/30
Annual Earnings	2021/05/31