Company Reports

MarketAxess operates the leading platform for the electronic trading of corporate bonds. While the company is primarily focused on U.S. securities, 30%-40% of its corporate bond trading volume comes from emerging market debt and Eurobonds, giving the company a strong international presence. MarketAxess also offers trading in U.S. Treasuries and municipal bonds, bolstering its efforts in these sectors through the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. That said, corporate bonds are the core of MarketAxess’ business which we expect will remain true, a consequence of being a relative newcomer to the treasury trading market and the smaller size of the municipal debt market.

Wide-moat-rated MarketAxess reported decent fourth-quarter results that were largely in line with our expectations as the firm benefited from higher trading volume industrywide. The firm's uninspiring market share performance, however, remains a concern. Fourth-quarter revenue increased 10.9% to $197.2 million, or 6.6% when adjusted for the acquisition of Pragma. Meanwhile, earnings per share increased 16.5% to $1.84 from $1.58 last year, although the company did benefit from an unusually low provision for income taxes in the quarter. As we incorporate these results, we do not plan to materially alter our $305 per share fair value estimate for MarketAxess, and we see the shares as undervalued at current prices.

Wide-moat-rated MarketAxess reported weak third-quarter earnings that were in line with our expectations as lower market share and reduced fee capture hurt results. MarketAxess' net revenue was effectively flat from last year at $172 million, while its net income fell 7.4% to $54.9 million when compared with the year-ago period. While these were not good results, we were already aware of the market share issues, which were behind a recent 13% reduction in our fair value estimate. As we incorporate these results, we do not expect to materially alter our $305 per share fair value estimate.

Following a string of weak trading volume reports, we are reducing our fair value estimate for MarketAxess to $305 from $350, which is 44 times our 2023 earnings estimate.

MarketAxess operates the leading platform for the electronic trading of corporate bonds. While the company is primarily focused on U.S. securities, 30%-40% of its corporate bond trading volume comes from emerging market debt and Eurobonds, giving the company a strong international presence. MarketAxess also offers trading in U.S. Treasuries and municipal bonds, bolstering its efforts in these sectors through the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. That said, corporate bonds are the core of MarketAxess’ business which we expect will remain true, a consequence of being a relative newcomer to the treasury trading market and the smaller size of the municipal debt market.

Wide-moat MarketAxess reported second-quarter results that were in line with our expectations, as weak trading volume was only partially offset by strong data and fixed-fee growth. Revenue declined 1.3% from last year and 11.5% from a strong first quarter to $180 million. Net income declined 10.6% to $59.9 million, in part due to foreign currency translation losses of $1.3 million versus a gain of $5.5 last year. While these results were not impressive, the decline in revenue was driven by trading volume, which is inherently volatile from quarter to quarter. As we incorporate these results, we do not expect to materially alter our $350 per share fair value estimate for MarketAxess.

MarketAxess operates the leading platform for the electronic trading of corporate bonds. While the company is primarily focused on U.S. securities, 30%-40% of its corporate bond trading volume comes from emerging market debt and Eurobonds, giving the company a strong international presence. MarketAxess also offers trading in U.S. Treasuries and municipal bonds, bolstering its efforts in these sectors through the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. That said, corporate bonds are the core of MarketAxess’ business which we expect will remain true, a consequence of being a relative newcomer to the treasury trading market and the smaller size of municipal debt market.

Wide-moat-rated MarketAxess reported results that were largely in line with our expectations as strong fixed-income trading volume was offset by weaker average pricing. Revenue increased 9% year over year, or 11% on a constant currency basis, and 14.2% sequentially to $203 million, while earnings per share increased 15% to $1.96. As we incorporate these results, we do not plan to materially alter our $360 fair value estimate for MarketAxess and see the shares as modestly undervalued.

MarketAxess operates the leading platform for the electronic trading of corporate bonds. While the company is primarily focused on U.S. securities, 30%-40% of its corporate bond trading volume comes from emerging market debt and Eurobonds, giving the company a strong international presence. MarketAxess also offers trading in U.S. Treasuries and municipal bonds, bolstering its efforts in these sectors through the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. That said, corporate bonds are the core of MarketAxess’ business which we expect will remain true, a consequence of being a relative newcomer to the treasury trading market and the smaller size of municipal debt market.

MarketAxess operates the leading platform for the electronic trading of corporate bonds. While the company is primarily focused on U.S. securities, 30%-40% of its corporate bond trading volume comes from emerging market debt and Eurobonds, giving the company a strong international presence. MarketAxess also offers trading in U.S. Treasuries and municipal bonds, bolstering its efforts in these sectors through the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. That said, corporate bonds are the core of MarketAxess’ business which we expect will remain true, a consequence of being a relative newcomer to the treasury trading market and the smaller size of municipal debt market.

Wide-moat-rated MarketAxess reported solid fourth-quarter results as it benefited from more corporate bond trading volume industrywide and higher market share, with gains partially offset by lower average fees. Net revenue increased 8% from last year, or 10% on a constant-currency basis, and 3% from last quarter to $179 million. The company benefited from strong cost management and more leverage against its fixed costs, with EBITDA rising 10% from the prior-year quarter to $95.2 million. As we incorporate these results, we do not plan to materially alter our $355 fair value estimate. We see the shares as roughly fairly valued.

Wide-moat-rated MarketAxess reported results that were in line with our expectations as the benefit from significantly higher trading volume was partially offset by lower fee per million. MarketAxess’ net revenue increased 6.2% year over year to $172 million, while diluted earnings per share rose 3.9% to $1.58. As we incorporate these results, we do not expect to materially alter our $355 fair value estimate for MarketAxess.

MarketAxess operates the leading platform for the electronic trading of corporate bonds. While the company is primarily focused on U.S. securities, 30%-40% of its corporate bond trading volume comes from emerging market debt and Eurobonds, giving the company a strong international presence. MarketAxess also offers trading in U.S. Treasuries and municipal bonds, bolstering its efforts in these sectors through the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. That said, corporate bonds are the core of MarketAxess’ business which we expect will remain true, a consequence of the more competitive nature of the treasury trading market and the smaller amount of municipal debt outstanding.

Wide-moat MarketAxess reported decent second-quarter results as impressive market share gains were undermined by weak pricing in the company’s investment-grade bond trading business. Total revenue was up 3.3% year over year to $182.2 million and earnings per share of $1.78 was effectively flat versus the prior year’s quarter result of $1.77. As we incorporate these results, we are maintaining our $345 fair value estimate for MarketAxess.

MarketAxess operates the leading platform for the electronic trading of corporate bonds. While the company is primarily focused on U.S. securities, 30%-40% of its corporate bond trading volume comes from emerging market debt and Eurobonds giving the company a strong international presence. MarketAxess also offers trading in U.S. Treasuries and municipal bonds, bolstering its efforts in these sectors through the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. That said, corporate bonds are the core of MarketAxess’ business which we expect will remain true, a consequence of the more competitive nature of the treasury trading market and the smaller amount of municipal debt outstanding.

Wide-moat-rated MarketAxess reported solid first-quarter earnings as the company benefited from an increase in bond market volatility, particularly in March. Earnings per share of $1.71 were 19% lower than last year’s results but 25% higher than the prior quarter. Similarly, revenue fell 4.8% from the prior-year quarter but grew 12.7% quarter over quarter to $186 million. As we incorporate these results, we are maintaining our $360 fair value estimate for MarketAxess and see the shares as modestly undervalued.

MarketAxess operates the leading platform for the electronic trading of corporate bonds. While the company is primarily focused on U.S. securities, 30% to 40% of its corporate bond trading volume comes from emerging market debt and Eurobonds giving the company a strong international presence. MarketAxess also offers trading in U.S. Treasuries and municipal bonds, bolstering its efforts in these sectors through the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. That said, corporate bonds are the core of MarketAxess’ business which we expect will remain true, a consequence of the more competitive nature of the treasury trading market and the smaller amount of municipal debt outstanding.

MarketAxess operates the leading platform for the electronic trading of corporate bonds. While the company is primarily focused on U.S. securities, 30% to 40% of its corporate bond trading volume comes from emerging market debt and Eurobonds giving the company a strong international presence. MarketAxess also offers trading in U.S. Treasuries and municipal bonds, bolstering its efforts in these sectors through the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. That said, corporate bonds are the core of MarketAxess’ business which we expect will remain true, a consequence of the more competitive nature of the treasury trading market and the smaller amount of municipal debt outstanding.

Wide-moat MarketAxess reported fourth-quarter results that were in line with our expectations heading into the release. Earnings per share fell 28% to $1.37 while revenue fell 4% to $165 million. While the drop in earnings was significant, 2020 is a difficult comparison as volatile fixed income markets drove higher trading volume industrywide and incentivized the use of electronic trading networks, like MarketAxess, over voice-based trading. Operating expenses also rose 16%, compressing margins. As we incorporate these results, we do not expect to make a material change to our $355 fair value estimate.

MarketAxess operates the leading platform for the electronic trading of corporate bonds. While the company is primarily focused on U.S. securities, 30% to 40% of its corporate bond trading volume comes from emerging market debt and Eurobonds giving the company a strong international presence. MarketAxess also offers trading in U.S. Treasuries and municipal bonds, bolstering its efforts in these sectors through the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. That said, corporate bonds are the core of MarketAxess’ business which we expect will remain true, a consequence of the more competitive nature of the treasury trading market and the smaller amount of municipal debt outstanding.