TMX Group (X) AI Stock Analysis

• Market Cap: C$16.05B
• Dividend Yield: 1.39%
• Average Volume (3M): 467.72K
• Price to Earnings (P/E): 35.8
• Beta (1Y): 0.44
• Revenue Growth: -2.24%
• EPS Growth: 10.14%
• Country: CA
• Employees: 2,039
• Sector: Financial
• Sector Strength: 81
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 0.48
• Shares Outstanding: 278,079,380
• 10 Day Avg. Volume: 399,961
• 30 Day Avg. Volume: 467,718
• PEG Ratio: 0.23
• Price to Book (P/B): 1.89
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 19.26
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$56.48
• Price Target Upside: 1.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 80 Outperform
• Price Target: C$63.00 ▲(12.80%Upside)

TMX Group exhibits a strong overall performance driven by robust financial health, positive technical indicators, and successful strategic initiatives as highlighted in the earnings call. However, the high P/E ratio suggests some concern about overvaluation. The strategic growth initiatives and strong revenue performance underscore a solid outlook, albeit with a need for caution regarding valuation metrics.

Positive Factors

Business Diversification

TMX's business diversification supports its ability to weather volatile markets.

Earnings

Record derivative volumes demonstrate the resiliency of TMX's model in turbulent markets.

Negative Factors

Trade Uncertainty

Trade uncertainty is expected to weigh on capital formation, with the IPO market remaining subdued.

TMX Group Business Overview & Revenue Model

Company Description

TMX Group Limited operates exchanges, markets, and clearinghouses primarily for capital markets in Canada and internationally. The company operates through four segments: Global Solutions, Insights & Analytics; Capital Formation; Derivatives Trading and Clearing; and Equities and Fixed Income Trading & Clearing. The Global Solutions, Insights & Analytics segment delivers equities and index data, as well as integrated data sets for the proprietary and third party analytics to help clients in making trading and investment decisions; and provides solutions to European and global wholesale energy markets for price discovery, trade execution, post-trade transparency, and straight through processing. The Capital Formation segment operates Toronto Stock Exchange, a national stock exchange for the senior equities market; TSX Venture Exchange, a national stock exchange for the public venture equity market; and TSX Trust that provides corporate trust, registrar, transfer agency, and foreign exchange services. The Derivatives Trading & Clearing segment operates Montreal Exchange, a national derivatives exchange; Canadian Derivatives Clearing Corporation, a clearinghouse for options and futures contracts; and various over-the-counter products and fixed income repurchase agreements. The Equities and Fixed Income Trading & Clearing segment engages in the trading operations of Toronto Stock Exchange, TSX Venture Exchange, and TSX Alpha Exchange; and clearing and settlement of equities and fixed income transactions, and custody of securities; and provision of fixed income inter-dealer brokerage services. The company was formerly known as Maple Group Acquisition Corporation and changed its name to TMX Group Limited in August 2012. TMX Group Limited was incorporated in 2011 and is headquartered in Toronto, Canada.

How the Company Makes Money

TMX Group generates revenue through a diversified set of streams primarily derived from its exchanges and related services. Key revenue sources include listing fees, which are charged to companies for the initial and ongoing privilege of being listed on its exchanges. Trading and clearing fees constitute a significant portion of revenue, as TMX charges fees for executing and clearing trades on its platforms. Additionally, TMX earns revenue from data products and services by selling real-time and historical market data to financial institutions, traders, and other stakeholders. TMX Group also benefits from its energy trading and clearing business through NGX and Shorcan Energy Brokers. Strategic partnerships and acquisitions enhance its capabilities and market reach, contributing to its earnings.

TMX Group Financial Statement Overview

Summary

TMX Group demonstrates a strong financial position with solid profitability, manageable leverage, and efficient cash flow generation. While there are areas for improvement, particularly in net income growth, the overall financial health is robust, indicative of a well-managed company in the financial data and stock exchange industry.

Income Statement

The income statement reveals strong profitability with a gross profit margin of 54.5% and a net profit margin of 23.1% for TTM. Revenue growth is robust at 32.9% compared to the previous annual period, indicating a positive trajectory. However, a slight decline in net income from the previous year may warrant attention. Overall, profitability and growth trends are favorable.

Balance Sheet

The balance sheet shows a healthy equity ratio of 8.7% and a manageable debt-to-equity ratio of 45.8%. Return on equity stands at 9.6%, reflecting moderate efficiency in generating returns for shareholders. While leverage is present, it remains under control, supporting a stable financial position.

Cash Flow

Cash flow analysis indicates positive free cash flow growth at 0.7% and strong operating cash flow relative to net income at 1.4x. The company's ability to convert income into cash is solid, supporting operational and financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.94B	1.46B	2.90B	1.12B	980.70M	865.10M
Gross Profit	1.06B	958.80M	2.81B	751.00M	662.60M	580.90M
EBITDA	1.88B	2.46B	2.35B	1.57B	578.30M	496.20M
Net Income	447.90M	481.50M	356.00M	542.70M	338.50M	279.70M
Balance Sheet
Total Assets	53.66B	40.21B	64.34B	55.98B	63.20B	36.10B
Cash, Cash Equivalents and Short-Term Investments	361.40M	433.40M	419.60M	493.10M	341.60M	277.90M
Total Debt	2.14B	2.17B	1.15B	1.11B	1.10B	1.01B
Total Liabilities	48.78B	35.39B	60.02B	51.78B	59.49B	32.49B
Stockholders Equity	4.67B	4.58B	4.11B	3.99B	3.71B	3.61B
Cash Flow
Free Cash Flow	553.60M	549.70M	459.70M	392.20M	390.20M	343.80M
Operating Cash Flow	638.30M	623.40M	524.90M	444.10M	441.40M	410.90M
Investing Cash Flow	-90.90M	-1.17B	-289.30M	-41.40M	-203.90M	-34.80M
Financing Cash Flow	-624.10M	562.60M	-309.20M	-292.90M	-194.80M	-304.40M

TMX Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 55.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:X, the sentiment is Positive. The current price of 55.85 is below the 20-day moving average (MA) of 56.18, above the 50-day MA of 55.39, and above the 200-day MA of 48.35, indicating a neutral trend. The MACD of 0.45 indicates Positive momentum. The RSI at 49.00 is Neutral, neither overbought nor oversold. The STOCH value of 54.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:X.

TMX Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
X	80 Outperform	C$16.05B	35.79	10.06%	1.39%	-2.24%	10.14%
Sector *	67 Neutral	$16.86B	11.64	9.71%	3.83%	11.61%	-9.60%
BN		$102.26B	209.60	1.36%	0.58%	―	―
IAG	81 Outperform	C$13.88B	15.76	12.54%	2.41%	-7.31%	28.65%
POW	74 Outperform	C$33.98B	12.62	11.92%	4.61%	7.63%	8.84%
BNT		$14.95B	―	4.97%	0.58%	―	―
BAM	69 Neutral	C$121.54B	38.67	18.95%	3.20%	27.17%	16.13%

TMX Group Corporate Events

TMX Group Reports Strong Q1 2025 Results with Strategic Advancements

TMX Group Limited reported a strong first quarter in 2025, with revenue increasing by 21% to $419.1 million compared to the previous year. Despite a decrease in diluted earnings per share due to a prior gain from an acquisition, the adjusted diluted earnings per share rose by 26%. The company highlighted significant progress in enterprise initiatives, including upgrades to clearing technology and a successful Post Trade Modernization project. These developments, along with the acquisition of Credit Suisse’s Bond Indices, are expected to enhance TMX’s market position and offer new growth opportunities, while a stable credit rating trend reflects improved financial stability.

TMX Group Declares $0.20 Dividend Per Share

TMX Group Limited has announced a dividend of $0.20 per common share, payable on June 6, 2025, to shareholders on record as of May 23, 2025. This declaration reflects TMX Group’s ongoing commitment to providing value to its shareholders and may positively influence investor confidence and market positioning.