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Tradeweb Markets Inc TW

Morningstar Rating
$104.60 +2.43 (2.38%)
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Company Report

Tradeweb Earnings: Good Market Conditions and Market Share Gains Drive Impressive Revenue Growth

Wide-moat-rated Tradeweb reported strong fourth-quarter results as high interest rate volatility drove strong trading volume, particularly for the firm’s interest rate swaps. Net revenue increased 26.3% from last year and 12.8% from last quarter to $370 million. Net income increased only 4.8% from last year to $107.7 million, though last year’s quarter benefited from an unusually low tax provision. Despite the strength, the release was in line with our expectations as Tradeweb reports its trading volume data monthly. As we incorporate these results, we do not plan to materially alter our $88 fair value estimate for Tradeweb.

Price vs Fair Value

TW is trading at a 19% premium.
Price
$104.60
Fair Value
$84.00
Uncertainty
Medium
1-Star Price
$965.80
5-Star Price
$63.40
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Tradeweb benefits from the secular transition away from voice negotiations toward its electronic trading platforms in fixed-income markets, providing the firm with an easy path for continued market share and revenue growth.

Bears

Tradeweb’s revenue base has become increasingly transactional, as growth in its transaction fees outpaces its fixed fees, creating more room for volatility in the firm’s results.

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News

Trading Information

Previous Close Price
$102.17
Day Range
$102.96105.26
52-Week Range
$64.83105.26
Bid/Ask
$41.84 / $108.64
Market Cap
$22.25 Bil
Volume/Avg
1.6 Mil / 1.1 Mil

Key Statistics

Price/Earnings (Normalized)
45.57
Price/Sales
16.30
Dividend Yield (Trailing)
0.34%
Dividend Yield (Forward)
0.34%
Total Yield
0.50%

Company Profile

Founded in 1998 and headquartered in New York City, Tradeweb Markets is a leading fixed-income trading platform. While it does offer electronic processing for some voice-negotiated trades, the company focuses primarily on providing electronic trading networks that connect broker/dealers, institutional clients, and retail customers. While the company offers trading in a wide variety of products, the bulk of its business is in U.S. and European government debt, mortgage-backed securities, interest-rate swaps, and U.S. and international corporate bonds. The firm also sells fixed-income trading and price data, primarily through a deal with Refinitiv’s Eikon service.
Sector
Financial Services
Industry
Capital Markets
Stock Style Box
Mid Growth
Total Number of Employees
1,179

Competitors

Valuation

Metric
TW
CME
ICE
Price/Earnings (Normalized)
45.5724.2124.27
Price/Book Value
4.052.903.04
Price/Sales
16.3013.877.80
Price/Cash Flow
27.8722.3819.65
Price/Earnings
TW
CME
ICE

Financial Strength

Metric
TW
CME
ICE
Quick Ratio
2.520.030.05
Current Ratio
2.571.031.00
Interest Coverage
25.914.19
Quick Ratio
TW
CME
ICE

Profitability

Metric
TW
CME
ICE
Return on Assets (Normalized)
8.22%2.01%2.10%
Return on Equity (Normalized)
10.39%11.53%13.14%
Return on Invested Capital (Normalized)
8.45%10.65%8.05%
Return on Assets
TW
CME
ICE
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