3 Big Reasons BGC Should Be On Your Watchlist

BGC Cover Image

Over the last six months, BGC’s shares have sunk to $8.91, producing a disappointing 12.4% loss - a stark contrast to the S&P 500’s 11.5% gain. This was partly driven by its softer quarterly results and might have investors contemplating their next move.

Following the drawdown, is now a good time to buy BGC? Find out in our full research report, it’s free.

Why Do Investors Watch BGC?

Tracing its roots back to 1945 and named after founder Bernard Gerald Cantor, BGC Group (NASDAQ: BGC) operates a global brokerage and financial technology platform that facilitates trading across fixed income, foreign exchange, equities, energy, and commodities markets.

Three Things to Like:

1. Skyrocketing Revenue Shows Strong Momentum

We at StockStory place the most emphasis on long-term growth, but within financials, a stretched historical view may miss recent interest rate changes, market returns, and industry trends. BGC’s annualized revenue growth of 18.7% over the last two years is above its five-year trend, suggesting its demand recently accelerated. BGC Year-On-Year Revenue GrowthNote: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

2. EPS Increasing Steadily

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

BGC’s EPS grew at a solid 14.9% compounded annual growth rate over the last five years, higher than its 5.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

BGC Trailing 12-Month EPS (Non-GAAP)

3. Previous Growth Initiatives Are Paying Off

Return on equity (ROE) measures how effectively banks generate profit from each dollar of shareholder equity - a critical funding source. High-ROE institutions typically compound shareholder wealth faster over time through retained earnings, share repurchases, and dividend payments.

Over the last five years, BGC has averaged an ROE of 11.2%, respectable for a company operating in a sector where the average shakes out around 10% and those putting up 25%+ are greatly admired. This shows BGC has a narrow competitive moat.

BGC Return on Equity

Final Judgment

BGC possesses several positive attributes. After the recent drawdown, the stock trades at 6.7× forward P/E (or $8.91 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.

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