Shares in the investment platform company have struggled since the start of the financial year. The weakness coincides with a choppy market which tends to reduce investor confidence and subsequent flows into the investment platforms, however, this slide also comes as Praemium enters a blackout period and must pause its buyback until the release of FY23 results next month. Local broking house Wilsons initiated coverage on the space – Hub24 (HUB), Netwealth (NWL) and Praemium (PPS) – last week, sticking buys on all three names with the commentary suggesting PPS has the “easiest” path to see its share price higher, not as heavily reliant on gaining market share given the internal levers it can pull. In the analyst’s view, the additional sales and marketing headcount brought in, additional platform margins on higher cash spread income and improved cost control given the domestic focus will create shareholder value, supported by the ongoing buyback when it returns. Netwealth had looked at taking out Praemium back in 2021 with the report noting that if the market continues to misprice PPS, peers will once again look to consolidate.
MM is bullish PPS
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