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MarketAxess Holdings Inc MKTX

Morningstar Rating
$213.55 −1.45 (0.67%)
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Company Report

MarketAxess Earnings: Better Trading Conditions Drive Revenue Growth, but Market Share Lags

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.

Price vs Fair Value

MKTX is trading at a 30% discount.
Price
$213.55
Fair Value
$983.00
Uncertainty
High
1-Star Price
$942.76
5-Star Price
$218.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

MarketAxess enjoys a commanding position in the market for electronic trading of credit bonds, particularly in U.S. high yield securities.

Bears

MarketAxess’s revenue base is mostly transactional, and results can vary from one quarter to the next based on market events.

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News

Trading Information

Previous Close Price
$215.00
Day Range
$211.70216.89
52-Week Range
$200.01399.78
Bid/Ask
$202.02 / $270.00
Market Cap
$8.09 Bil
Volume/Avg
1 / 370,083

Key Statistics

Price/Earnings (Normalized)
33.01
Price/Sales
10.82
Dividend Yield (Trailing)
1.36%
Dividend Yield (Forward)
1.39%
Total Yield
1.36%

Company Profile

Founded in 2000, MarketAxess is a leading electronic fixed-income trading platform that connects broker/dealers and institutional investors. The company is primarily focused on credit based fixed income securities with its main trading products being U.S. investment-grade and high-yield bonds, Eurobonds, and Emerging Market corporate debt. Recently the company has expanded more aggressively into Treasuries and municipal bonds with the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. The company also provides pre- and post-trade services with its acquisition of Regulatory Reporting Hub from Deutsche Börse Group in 2020 adding to its product offerings.
Sector
Financial Services
Industry
Capital Markets
Stock Style Box
Small Growth
Total Number of Employees
744

Competitors

Valuation

Metric
MKTX
CME
ICE
Price/Earnings (Normalized)
33.0124.2124.27
Price/Book Value
6.342.903.04
Price/Sales
10.8213.877.80
Price/Cash Flow
23.3422.3819.65
Price/Earnings
MKTX
CME
ICE

Financial Strength

Metric
MKTX
CME
ICE
Quick Ratio
2.280.030.05
Current Ratio
2.671.031.00
Interest Coverage
775.1125.914.19
Quick Ratio
MKTX
CME
ICE

Profitability

Metric
MKTX
CME
ICE
Return on Assets (Normalized)
16.86%2.01%2.10%
Return on Equity (Normalized)
24.65%11.53%13.14%
Return on Invested Capital (Normalized)
21.77%10.65%8.05%
Return on Assets
MKTX
CME
ICE
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