IG Group: Company performance analysis

According to data from TipRanks, there have only been five director/major shareholder transactions in the past six months. The majority of transactions have been ‘buys’, which tends to be a positive indicator. However, it’s worth noting that, excluding grant/award-related transactions, there is limited data.

• Susan Skerrit – Non-Executive, Director
  Informative Buy – 862 shares
• Charlie Rozes Chief Financial Officer
  Informative Sell. Options Exercised and fully sold – 23,088 shares
• Charlie Rozes – Chief Financial Officer
  Uninformative Buy, Grant/Award/Other – 49,367 shares
• Matt Macklin – Regional Chief Executive Officer
  Uninformaive Buy, Auto Buy – 144 shares
• Robert Michael Mctigh – Chairman, Director
  Informative Buy – 6,400 shares

IG Group’s stock trading and investment platform remains a relatively small part of its business, and as companies don’t tend to use Assets Under Administration (AUA) as a metric for trading platforms, the above figures may appear relatively small in comparison to its FTSE 350 peers.

Stock trading and investment product AUA has risen from £3.2 billion in 2021 to £3.9 billion in 2024. The £0.6 billion jump between 2023 and 2024 was largely attributed to market performance – the appreciation of stocks and other assets – during the period.

Number of users vs previous year and quarter.

The majority of IG Group clients use the OTC derivatives and exchange-traded derivatives products. IG Group’s total client numbers and stock trading and investment clients have not followed linear trajectories in recent years. There are currently 346,200 total clients and 86,900 stock trading and investment clients.

Average revenue per user (ARPU) vs previous year and quarter.

Average Revenue Per User (ARPU) differs greatly according to the product type. IG Group’s stock trading and investment platform is the group’s lowest revenue generator per client. In 2024, APRU on the stock trading and investment platform was equal to £263, while OTC derivative products generated £3,803 per client.

Revenue vs previous year vs consensus estimates.

Despite non-linear trajectories in users and APRU, IG Group’s revenue has broadly moved in the right direction over the past five years, reaching £1.02 billion in 2023 before falling to £987.3 million in 2024. According to data from FactSet, this positive trend is set to continue. Revenue is expected to reach £1.03 billion for FY2025.

IG Group says that increasing revenues have reflected “robust cash balances and higher interest rates”, likely referring to strong returns on client cash held on the platforms.

Earnings per share (EPS) vs previous year vs consensus estimates.

Earnings per share (EPS) peaked in 2021 at 99.8p and has been on a downward trajectory since. Declining earnings reflect softer market conditions – trading platforms tend to benefit from volatility – and cost inflation in 2024. According to FactSet data, EPS will surge to 103.7p in FY2025.

Revenue breakdown

IG Group provides a revenue breakdown based on product type; OTC derivatives, exchange-traded derivatives, and stock trading and investments.

In 2024, the OTC derivatives products delivered £681 million in revenue, down from £782 million the year before.
In 2024, the exchange-traded derivatives products brought in £141.1 million in revenue, up from £137.1 million in 2023.
In 2024, the stocks and investment products brought in £22.8 million, up from 22.7 million in 2023.

Profit before tax margin vs previous year and quarter vs consensus estimates.

The Profit Before Tax (PBT) ratio is a financial metric that measures a company’s profitability before tax expenses are deducted. The company has maintained a healthy PBT ratio over the last five years.

Free cash flow vs previous year vs consensus estimates.

IG Group reported free cash flow of £414.4 million for 2024 according to FactSet data. This was up from £181.4 million in 2023 but down from £695.9 million in 2022. According to data from FactSet, free cash flow is likely to come in at around £381 million in 2025.

Net debt/cash vs previous year vs previous quarter.

According to data from FactSet, IG Group is in a strong financial position with a net cash position of £770.6 million at the end of FY2024. This was up from £707 million at the end of 2023.

Analysts’ price targets and ratings including commentary.

Based on seven analysts offering 12-month price targets for IG Group in the last 3 months. The average price target is 1,049.82p with a high forecast of 1,150p and a low forecast of 857p.