Tradeweb Earnings: Strong Revenue Growth From Market Share Gains and Favorable Market Conditions

Wide-moat-rated Tradeweb reported strong first-quarter results as growing market share and high trading volume industrywide drove a sharp increase in trading revenue, which increased 24% year over year and 11% sequentially to $408.7 million. Adjusted diluted earnings per share increased 32% from last year to $0.71 as strong revenue growth provided the firm better scale against its fixed costs. While these were excellent results, and we expect strong secular growth to continue for the company, Tradeweb also benefited from interest-rate uncertainty and strong corporate bond issuance, which led to high trading activity industrywide during the quarter. These are temporary factors, so we caution investors not to read too much into the jump in sequential growth. As we incorporate these results, we do not expect to materially alter our $92 per share fair value estimate. We see the shares as modestly overvalued.