CMC Markets (LSE: CMCX) is a FTSE stock with a lot going for it. In my view, it doesn’t get the attention it deserves.
Here, I’m going to highlight the bull case and look at the company’s latest numbers (which are fantastic). Could this stock be worth considering for an ISA or SIPP?
A scalable business model
CMC is a leading provider of investment and trading platforms. Today, it operates in 12 countries, serving around 2m investors and traders.
The beauty of its business model is that it can profit both when markets are rising and when they’re falling (traders often try to capitalise on volatility). Another attraction is that it’s very scalable – not only does it have the potential to consistently onboard new customers onto its platforms but it’s also doing white-label deals with other institutions.
Sensational results
The power of this business model is illustrated in today’s (4 June) preliminary results for the financial year ended 31 March 2026. For the year:
- Net operating income was up 15% year on year to £392.6m.
- Profit before tax was up 20% to £101.3m.
- Basic earnings per share (EPS) were up 22% to 27.5p.
On the back of this strong performance, the company hiked its dividend by 21% to 13.8p per share. That translates to a yield of around 3.2% at today’s share price up (which is up about 17% after the results).
What’s driving growth?
Digging deeper into the results, the company said that it saw a record performance in its Australian stockbroking business (it’s now the second largest stockbroker in Oz after doing a major deal with Westpac bank). Here, net operating income was A$140.3m, up 32% year on year.
It also saw growth in institutional and B2B income during the year. It seems its Neobank API partnership is leading to significant new account openings and trading activity.
Bullish outlook
While all of the above is encouraging, the outlook was perhaps the most exciting part of the results. Here, the company said that it has reached a “key inflection point,” with institutional and B2B partnerships providing access to large embedded client bases and enabling “growth at scale.”
It expects the next 12 months to be a “defining period” as it rolls out a multi-asset super app. In terms of numbers, net operating income is expected to rise by at least 17% year on year in the current financial year.
Consider buying on a pullback
Now, the share price has popped today (up 17% as I write) after these excellent results. So, it might not be smart to pile into the stock this minute.
But if it pulls back a little, I think it’s worth considering. As I said, this is a very scalable company.
Meanwhile, the valuation isn’t high. Assuming 15% growth in EPS next year, we are looking at a price-to-earnings (P/E) ratio of around 14.
Of course, competition from the likes of Robinhood (I hold this stock), Trading 212, and Freetrade is a risk. Overall though, I see a lot of appeal.
Should you invest £5,000 in Cmc Markets Plc right now?
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Edward Sheldon owns shares in Robinhood Markets
