MarketAxess Earnings: Lower Market Share in Corporate Bonds Is Offset by Strong Market Conditions

Wide-moat-rated MarketAxess reported first-quarter results that were in line with our expectations, as strong volume in US investment-grade and emerging-market debt was offset by a decline in the firm's market share of US high-yield corporate bond trading. Revenue increased 3.5% from last year and 6.6% from last quarter to $210 million. Meanwhile, diluted earnings per share decreased to $1.92 from $1.96, with the decline mostly due to higher expenses associated with the firm's acquisition of Pragma. As we incorporate these results, we do not plan to materially alter our $300 per share fair value estimate, and we see the shares as undervalued at current prices.