Revenue Downgrade: Here's What Analysts Forecast For Plus500 Ltd. (LON:PLUS)

One thing we could say about the analysts on Plus500 Ltd. (LON:PLUS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the consensus from four analysts covering Plus500 is for revenues of US$665m in 2025, implying a considerable 13% decline in sales compared to the last 12 months. Statutory earnings per share are anticipated to descend 12% to US$3.28 in the same period. Prior to this update, the analysts had been forecasting revenues of US$740m and earnings per share (EPS) of US$3.60 in 2025. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.

See our latest analysis for Plus500

Analysts made no major changes to their price target of US$37.97, suggesting the downgrades are not expected to have a long-term impact on Plus500's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Plus500 at US$42.71 per share, while the most bearish prices it at US$33.43. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 13% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 3.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.5% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Plus500 is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Plus500. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Plus500's revenues are expected to grow slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Plus500 after today.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Plus500 going out to 2027, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.