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Marketaxess (MKTX)
:MKTX
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Marketaxess Holdings
(NASDAQ:MKTX)73Outperform
Positive Factors
Market Share Improvement
Market share showed an improvement month-over-month, suggesting some positive momentum.
Volume Growth
Rates ADV of $27.1 billion was up +64% year over year and +2% above consensus estimates.
Negative Factors
Earnings Estimate Reduction
The earnings per share estimate for the first quarter was reduced, indicating lower expected profitability.
Marketaxess Holdings (MKTX) vs. S&P 500 (SPY)
Market Cap
$7.77B
Dividend Yield1.45%
Average Volume (3M)836.21K
Price to Earnings (P/E)28.3
Beta (1Y)0.52
Revenue Growth9.06%
EPS Growth6.10%
CountryUS
Employees881
SectorFinancial
Sector Strength93
IndustryCapital Markets
Share Statistics
EPS (TTM)7.28
Shares Outstanding37,693,220
10 Day Avg. Volume1,222,612
30 Day Avg. Volume836,206
Financial Highlights & Ratios
PEG Ratio4.64
Price to Book (P/B)N/A
Price to Sales (P/S)9.51
Price to Cash Flow (P/CF)11.00
P/FCF Ratio11.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$236.38Price Target Upside13.13% Upside
Rating ConsensusHold
Number of Analyst Covering10
Marketaxess Holdings Business Overview & Revenue Model
Company DescriptionMarketAxess Holdings Inc. is a leading financial technology company operating in the electronic trading sector, primarily facilitating the trading of fixed-income securities. Established in 2000 and headquartered in New York City, the company provides an electronic trading platform that connects institutional investors and broker-dealers, enabling them to trade corporate bonds and other fixed-income instruments efficiently. MarketAxess is recognized for its advanced technology solutions and data-driven insights, which enhance transparency and liquidity in the fixed-income markets.
How the Company Makes MoneyMarketAxess makes money primarily through transaction fees charged on trades executed via its electronic platform. These fees are generally a percentage of the notional value of the trade. The company also generates revenue from data services, offering market data products that provide valuable insights and analytics to clients. Moreover, MarketAxess benefits from subscription fees for access to its trading platform and additional tools. The company's earnings are bolstered by strategic partnerships with financial institutions and by expanding its service offerings to new markets and products, such as emerging market bonds and municipal bonds.
Marketaxess Holdings Financial Statement Overview
Summary
Marketaxess Holdings showcases strong financial health with impressive revenue growth, solid profitability metrics, and effective cash flow management. The company's low leverage and strong capital structure provide stability, while the consistent generation of free cash flow enhances its capacity for future investments. Potential areas for improvement include maintaining EBIT growth and monitoring equity growth rates.Income Statement
Marketaxess Holdings has demonstrated strong revenue growth with a significant increase from $511.35 million in 2019 to $817.10 million in 2024, indicating a robust upward trajectory. The gross profit margin is consistently high, maintaining above 60% in recent years, with a notable EBIT margin around 40% and improving EBITDA margins. The net profit margin remains stable, reflecting strong profitability, although the slight decline in EBIT from 2020 requires monitoring.85
Very Positive
Balance Sheet
The company's financial leverage is low with a debt-to-equity ratio consistently below 0.1, indicating prudent financial management. The equity ratio is strong, reflecting a solid capital structure with equity financing prevailing. While the return on equity (ROE) is consistently healthy, a slight decrease in equity growth could impact future gains.78
Positive
Cash Flow
Marketaxess Holdings exhibits a strong free cash flow growth, enhancing from $231.23 million in 2019 to $375.30 million in 2024, reinforcing financial flexibility. The operating cash flow to net income ratio is strong, suggesting efficient cash conversion from earnings. However, cash flow from investing activities is negative, reflecting ongoing capital investments.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 817.10M | 752.55M | 718.30M | 698.95M | 689.13M | Gross Profit |
| 566.53M | 482.92M | 536.20M | 528.03M | 532.24M | EBIT |
| 340.87M | 315.02M | 326.88M | 337.24M | 374.73M | EBITDA |
| 432.77M | 395.10M | 393.97M | 397.51M | 417.57M | Net Income Common Stockholders |
| 274.18M | 258.06M | 250.22M | 257.89M | 299.38M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 649.25M | 550.96M | 430.75M | 506.74M | 460.86M | Total Assets |
| 1.79B | 2.02B | 1.61B | 1.53B | 1.33B | Total Debt |
| 72.65M | 79.68M | 82.68M | 88.42M | 93.61M | Net Debt |
| -471.82M | -371.60M | -348.07M | -418.31M | -367.25M | Total Liabilities |
| 400.56M | 722.10M | 526.68M | 489.14M | 376.37M | Stockholders Equity |
| 1.39B | 1.29B | 1.08B | 1.04B | 955.06M |
| Cash Flow | Free Cash Flow | |||
| 375.30M | 281.32M | 237.36M | 231.47M | 358.86M | Operating Cash Flow |
| 385.24M | 333.77M | 289.23M | 282.09M | 404.49M | Investing Cash Flow |
| -86.94M | -155.29M | -86.27M | -67.69M | 68.87M | Financing Cash Flow |
| -201.38M | -147.06M | -242.38M | -189.78M | -145.11M |
Marketaxess Holdings Technical Analysis
Negative
208.94
Price Trends
210.18
Negative
237.53
Negative
231.86
Negative
Market Momentum
-2.72
Negative
59.23
Neutral
85.22
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKTX, the sentiment is Negative. The current price of 208.94 is above the 20-day moving average (MA) of 195.23, below the 50-day MA of 210.18, and below the 200-day MA of 231.86, indicating a neutral trend. The MACD of -2.72 indicates Negative momentum. The RSI at 59.23 is Neutral, neither overbought nor oversold. The STOCH value of 85.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MKTX.
Marketaxess Holdings Risk Analysis
Marketaxess Holdings disclosed 34 risk factors in its most recent earnings report. Marketaxess Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Marketaxess Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $91.54B | 26.26 | 13.26% | 4.09% | 9.88% | 9.18% | |
79 Outperform | $22.30B | 29.53 | 18.42% | 1.15% | 8.51% | 1.13% | |
77 Outperform | $97.47B | 35.48 | 10.32% | 1.06% | 15.32% | 14.02% | |
75 Outperform | $43.81B | 39.50 | 10.15% | 1.23% | 21.96% | -8.37% | |
73 Outperform | $7.77B | 28.32 | 20.45% | 1.45% | 9.06% | 6.10% | |
73 Outperform | $16.94B | 31.91 | 29.17% | 0.94% | 5.02% | 12.58% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
MKTX
Marketaxess Holdings
208.94
-11.28
-5.12%
CBOE
Cboe Global Markets
213.00
31.39
17.28%
CME
CME Group
254.57
47.39
22.87%
FDS
Factset Research
440.73
-31.62
-6.69%
ICE
Intercontinental Exchange
170.24
34.94
25.82%
NDAQ
Nasdaq
74.66
15.47
26.14%
Marketaxess Holdings Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 5.91% | Next Earnings Date: Apr 16, 2025
Earnings Call Sentiment Positive
The earnings call reflected a positive outlook for MarketAxess with multiple records and growth in various segments, despite challenges in the U.S. high-grade market share and a decline in U.S. high yield activity.Highlights
Record Revenue Growth
MarketAxess reported a 9% growth in revenue for 2024, marking the strongest annual revenue growth rate since 2020, with record commission revenue and record services revenue.
Portfolio Trading and High-Touch Strategy
Record levels of portfolio trading ADV were achieved in 2024, with significant market share gains in U.S. high-grade portfolio trading.
Expansion in Trading Volume
Record total PT ADV of over $900 million and record U.S. credit PT ADV of $800 million with record market share of 16% in portfolio trading.
Strong Growth in International Products
International product ADV reached a record $5 billion, up 17%, including record local markets ADV of over $1.4 billion, up 18%.
Technology Services Revenue Growth
Technology Services revenue increased by 41%, driven by higher Pragma-related license fees.
Lowlights
Disappointing U.S. High-Grade Market Share
Continued challenges and disappointing market share in the U.S. high-grade market, particularly noted in January.
Decline in U.S. High Yield
A 19% decline in U.S. high-yield activity was reported, attributed to lower levels of credit spread volatility.
Company Guidance
During the MarketAxess earnings call for the fourth quarter and full year 2024, several key metrics and strategic initiatives were highlighted. The company reported a 9% growth in revenue, with record commission and services revenue. Portfolio trading average daily volume (ADV) reached record levels, with notable increases in U.S. high-grade portfolio trading market share. The trading ADV in the rates business grew significantly, from $2.9 billion per day in Q1 to $11.4 billion in Q4 2024. The company also experienced a 175% increase in portfolio trading ADV in emerging markets compared to 2023. For 2025, MarketAxess expects mid-single-digit growth in total services revenue and projects total expenses to range between $505 million and $525 million. The effective tax rate is anticipated to be between 23.5% and 24.5%, with capital expenditures estimated at $65 million to $70 million. The company's focus for 2025 is on delivering and executing their high-touch block solution and enhancing their dealer solutions to drive market share growth.Marketaxess Holdings Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
MarketAxess Holdings Expands Board with New Appointment
Positive
Jan 27, 2025
On January 23, 2025, MarketAxess Holdings Inc. elected Roberto Hoornweg to its Board of Directors, effective March 1, 2025. Mr. Hoornweg, who brings extensive expertise in global financial markets, will serve on the Board’s Risk and Finance Committees. His appointment is expected to enhance the company’s strategic focus on expanding across global markets, leveraging his substantial knowledge in fixed-income sectors.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.