TMX Group (X) AI Stock Analysis

• Market Cap: C$13.10B
• Dividend Yield: 1.61%
• Average Volume (3M): 708.39K
• Price to Earnings (P/E): 30.8
• Beta (1Y): 0.39
• Revenue Growth: -6.09%
• EPS Growth: 12.76%
• Country: CA
• Employees: 2,039
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 0.60
• Shares Outstanding: 278,205,630
• 10 Day Avg. Volume: 648,819
• 30 Day Avg. Volume: 708,392
• PEG Ratio: -2.43
• Price to Book (P/B): 3.05
• Price to Sales (P/S): 4.97
• P/FCF Ratio: 25.63
• 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$59.99
• Price Target Upside: 30.40% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 2.27
• Revenue Forecast (FY): C$1.86B

• Rating: 66 Neutral
• Price Target: C$49.00 ▲(6.50% Upside)
• Action: Downgraded Date: 02/08/26
• Date: Action: Downgraded 02/08/26

Overall score reflects solid fundamentals and upbeat business momentum from the earnings call (strong revenue growth and durable cash generation), partially offset by sharp 2025 margin compression and a weak technical backdrop (below key moving averages with negative MACD and oversold readings). Valuation is moderately limiting given the ~30x P/E and modest yield.

Positive Factors

Free Cash Flow Strength

Consistently strong free cash flow (C$566.6M, ~82% of net income) provides durable internal funding for technology investment, acquisitions, dividends and buybacks. This cash conversion supports long-term financial flexibility and resiliency through cycle fluctuations.

Diversified Market Infrastructure

TMX's mix of exchanges, clearing, market data, listing fees and technology services creates recurring, fee-based revenues with network effects and high switching costs. This diversification reduces single-market exposure and supports stable, long-term cash flows.

Sustained Organic Growth and Strategic M&A

Repeated double-digit top-line growth, broad-based gains across derivatives, equities and Global Insights, plus targeted acquisitions (Trayport, VettaFi, Verity) expand addressable markets and cross-sell opportunities, underpinning durable revenue expansion.

Negative Factors

Material Margin Compression

A sharp decline in net margin from ~33% to ~14% signals meaningful pressure on profitability. If driven by structural cost or mix changes, lower margins can reduce return on capital and free cash flow potential, constraining sustainable shareholder returns.

Rising Operating Expenses

Sustained increases in operating costs from acquisitions and ongoing investment weaken operating leverage. If expense growth outpaces organic revenue gains, it can keep margins depressed and limit incremental profitability from future revenue.

Higher Leverage vs. Prior Years

The step-up in leverage reduces balance-sheet flexibility and increases financing risk. Combined with margin pressure, higher indebtedness raises vulnerability to cash flow swings and may constrain capital allocation for M&A or shareholder returns over the medium term.

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 primarily through transaction fees charged for trading activities on its exchanges, including fees from equity, derivatives, and fixed income transactions. Additionally, it earns income from listing fees paid by companies that go public on its exchanges. Another significant revenue stream comes from data services, where TMX provides market data to financial institutions and other clients. The company also benefits from its technology services, which include trading and market infrastructure solutions. Partnerships with financial institutions and corporations, as well as the growing demand for capital raising and trading services, contribute to its overall earnings.

TMX Group Financial Statement Overview

Summary

Strong and consistent cash generation (FCF C$566.6M; ~82% of net income) supports business quality, but 2025 profitability compressed materially (net margin down to 14.23% from 32.98%) and leverage is moderately higher than prior years (debt-to-equity ~0.48 vs. ~0.28 in 2022–2023).

Income Statement

Revenue shows a strong step-up in 2025 (+51.5% YoY) after being essentially flat in 2024 (-0.5%), indicating improving top-line momentum but with some volatility year-to-year. Profitability is positive, though net margin has compressed meaningfully from 2024 (32.98%) to 2025 (14.23%), suggesting higher costs, mix shift, or one-time impacts. Gross margin also declined in 2025 versus 2024, reinforcing that the recent growth came with weaker incremental profitability.

Balance Sheet

Leverage remains moderate, with debt-to-equity around ~0.48 in 2024–2025, but this is higher than 2022–2023 (~0.28), signaling a step-up in balance-sheet risk versus earlier years. Equity has steadily grown (from ~C$3.61B in 2020 to ~C$4.76B in 2025), which supports financial flexibility. Returns on equity are solid but not exceptional, running in the high-single-digits to low-teens range (8.7% in 2025 vs. 10.5% in 2024), showing a slight recent softening in profitability relative to shareholder capital.

Cash Flow

Cash generation is consistently strong: free cash flow is substantial (C$566.6M in 2025) and generally tracks net income well, with free cash flow running at ~82% of net income in 2025 and ~88% in 2024. Operating cash flow and free cash flow have trended upward over the period, supporting reinvestment capacity and shareholder returns. The key drawback is that free cash flow growth turned negative in 2025 (-7.1%) after modest growth in 2024, indicating a near-term slowdown in cash flow momentum.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.92B	1.46B	2.90B	1.11B	980.70M
Gross Profit	1.23B	958.80M	2.81B	749.30M	662.60M
EBITDA	2.12B	2.46B	2.38B	1.57B	658.00M
Net Income	415.70M	481.50M	356.00M	542.70M	338.50M
Balance Sheet
Total Assets	50.72B	40.21B	64.34B	55.98B	63.20B
Cash, Cash Equivalents and Short-Term Investments	757.60M	433.40M	419.60M	493.10M	341.60M
Total Debt	2.27B	2.17B	1.15B	1.11B	1.10B
Total Liabilities	45.75B	35.39B	60.02B	51.78B	59.49B
Stockholders Equity	4.76B	4.58B	4.11B	3.99B	3.71B
Cash Flow
Free Cash Flow	566.60M	549.70M	459.70M	392.20M	390.20M
Operating Cash Flow	687.80M	623.40M	524.90M	444.10M	441.40M
Investing Cash Flow	-259.20M	-1.17B	-289.30M	-41.40M	-203.90M
Financing Cash Flow	-387.70M	562.60M	-309.20M	-292.90M	-194.80M

TMX Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 46.01
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Negative. The current price of 46.01 is below the 20-day moving average (MA) of 46.36, below the 50-day MA of 49.17, and below the 200-day MA of 52.34, indicating a bearish trend. The MACD of -0.81 indicates Negative momentum. The RSI at 43.12 is Neutral, neither overbought nor oversold. The STOCH value of 73.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:X.

TMX Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IGM	75 Outperform	C$15.84B	14.58	12.37%	3.59%	-1.02%	-5.65%
IAG	72 Outperform	C$14.08B	13.70	14.34%	2.11%	-25.13%	16.40%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
X	66 Neutral	C$13.10B	30.78	9.87%	1.61%	-6.09%	12.76%
CF	57 Neutral	C$1.35B	-6.02	-29.66%	2.96%	14.59%	-4520.50%
GLXY	49 Neutral	C$11.56B	-9.24	-2.77%	―	―	-121.84%

TMX Group Corporate Events

TMX Group Posts Record Q4 Revenue, Lifts Dividend Despite FX Hit to Earnings

TMX Group reported record fourth-quarter 2025 revenue of $457.8 million, up 16% year over year, driven by higher derivatives trading rates and volumes, increased equity trading activity, a rebound in capital formation financings on TSX and TSXV, and continued double-digit growth from its TMX VettaFi and TMX Trayport businesses. Despite the top-line strength and a 22% rise in adjusted diluted earnings per share to $0.60, reported diluted EPS fell 29% to $0.41 due to net foreign exchange losses, while operating expenses climbed 19% on higher headcount, technology and modernization costs, and severance; reflecting confidence in its growth outlook and cash generation, the board approved a 9% increase in the quarterly dividend to $0.24 per share, the fourth hike in two years, underscoring the company’s commitment to shareholder returns amid ongoing investments in post-trade modernization and global expansion.

The most recent analyst rating on (TSE:X) stock is a Buy with a C$67.00 price target. To see the full list of analyst forecasts on TMX Group stock, see the TSE:X Stock Forecast page.

TMX Group Lifts Quarterly Dividend 9% Amid Ongoing Growth Focus

TMX Group Limited has announced a 9% increase in its quarterly dividend to $0.24 per common share, its fourth dividend hike in two years, payable on March 6, 2026 to shareholders of record as of February 20, 2026. The move, designated as an eligible dividend for Canadian tax purposes, underlines management’s confidence in the company’s diversified, high-performance business model and signals an ongoing commitment to returning capital to shareholders while maintaining a focus on accelerating growth and disciplined capital allocation.

The most recent analyst rating on (TSE:X) stock is a Buy with a C$67.00 price target. To see the full list of analyst forecasts on TMX Group stock, see the TSE:X Stock Forecast page.