MarketAxess Earnings: Strong Trading Volume in Multiple Markets Drives Results Higher

Wide-moat-rated MarketAxess reported strong third-quarter earnings that were in line with our expectations as strong trading volume drove revenue higher. Total revenue increased 20% from last year and 4.6% from last quarter to $206.7 million. Meanwhile, diluted earnings per share increased 30% from last year to $1.90. While these are good results, we had high expectations heading into the release following the high trading volume seen in the firm’s monthly reports. As we incorporate these results, we do not expect to materially alter our $305 fair value estimate. We see the shares as modestly undervalued following the market’s reaction to earnings.