The analysts covering Plus500 Ltd. (LON:PLUS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the consensus from Plus500's four analysts is for revenues of US$665m in 2025, which would reflect a not inconsiderable 13% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to drop 12% to US$3.28 in the same period. Previously, the analysts had been modelling 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 measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

View our latest analysis for Plus500 LSE:PLUS Earnings and Revenue Growth March 14th 2025

Despite the cuts to forecast earnings, there was no real change to the US$37.97 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Plus500, with the most bullish analyst valuing it at US$42.71 and the most bearish at US$33.43 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Plus500 is an easy business to forecast or the underlying assumptions are obvious.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 13% by the end of 2025. This indicates a significant reduction from annual growth of 3.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.5% per year. 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 most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales 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.

Story Continues

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Plus500 analysts - 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.

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