TMX Group (X) AI Stock Analysis

• Market Cap: C$14.49B
• Dividend Yield: 1.61%
• Average Volume (3M): 708.39K
• Price to Earnings (P/E): 31.5
• Beta (1Y): 0.48
• 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): 0.52
• Shares Outstanding: 278,205,630
• 10 Day Avg. Volume: 648,819
• 30 Day Avg. Volume: 708,392
• PEG Ratio: 0.71
• Price to Book (P/B): 2.68
• Price to Sales (P/S): 8.41
• P/FCF Ratio: 22.35
• 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$62.20
• Price Target Upside: 18.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 2.05
• Revenue Forecast (FY): C$1.69B

• Rating: 70 Outperform
• Price Target: C$57.00 ▲(8.99% Upside)

TMX Group's strong revenue growth and operational efficiency are key strengths, supported by positive earnings call insights. However, concerns about declining profitability margins and cash flow generation, along with a high P/E ratio, moderate the overall score.

Positive Factors

Revenue Growth

Consistent double-digit revenue growth across multiple quarters demonstrates strong market demand and effective business strategies, enhancing long-term financial stability.

Strategic Acquisitions

Strategic acquisitions in key sectors enhance TMX Group's service offerings and competitive position, supporting sustained growth and market leadership.

Operational Efficiency

Strong operational efficiency through high margins allows TMX Group to maintain profitability and reinvest in growth, ensuring long-term competitiveness.

Negative Factors

Declining Profitability Margins

Decreasing net profit margins suggest rising costs or pricing pressures, which could impact future profitability and financial health if not addressed.

Increased Operating Expenses

Rising operating expenses can erode profit margins and limit the company's ability to invest in growth initiatives, potentially affecting long-term performance.

Cash Flow Generation Challenges

Weak cash flow generation may constrain TMX Group's ability to fund operations and growth, posing risks to financial flexibility and stability.

TMX Group Business Overview & Revenue Model

Company Description

TMX Group is a leading Canadian financial services company that operates the Toronto Stock Exchange (TSX) and the TSX Venture Exchange (TSXV). It provides a diverse range of products and services, including equity and fixed income trading, derivatives, market data, and listing services for public companies. TMX Group also offers clearing and settlement services and is involved in various sectors such as capital markets, technology, and information services, positioning itself as a key player in the Canadian financial ecosystem.

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

TMX Group shows a stable financial position with strong cash flow management and moderate leverage. However, declining revenue and profitability margins pose challenges. The company needs to address revenue growth and improve operational efficiency to enhance profitability and shareholder returns.

Income Statement

The income statement shows a mixed performance. The company has a strong gross profit margin of 64.95% TTM, indicating efficient cost management. However, the net profit margin has decreased to 26.58% TTM from 32.98% in the previous year, reflecting reduced profitability. Revenue growth is negative at -18.12% TTM, suggesting a decline in sales. The EBIT and EBITDA margins are unusually high due to potential accounting adjustments, which may not reflect operational efficiency accurately.

Balance Sheet

The balance sheet is relatively stable with a debt-to-equity ratio of 0.45 TTM, indicating moderate leverage. The return on equity has decreased to 2.92% TTM from 10.52% in the previous year, suggesting reduced efficiency in generating returns from equity. The equity ratio is healthy, showing a strong equity base relative to total assets.

Cash Flow

Cash flow analysis reveals a positive trend with a free cash flow growth rate of 12.10% TTM, indicating improved cash generation. The operating cash flow to net income ratio is low at 0.02 TTM, which may suggest potential issues in converting income into cash. However, the free cash flow to net income ratio remains strong at 87.58% TTM, highlighting effective cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.93B	1.46B	2.90B	1.11B	980.70M	865.10M
Gross Profit	1.14B	958.80M	2.81B	749.30M	662.60M	580.90M
EBITDA	1.90B	2.46B	2.38B	1.57B	658.00M	664.60M
Net Income	459.80M	481.50M	356.00M	542.70M	338.50M	279.70M
Balance Sheet
Total Assets	50.36B	40.21B	64.34B	55.98B	63.20B	36.10B
Cash, Cash Equivalents and Short-Term Investments	585.40M	433.40M	419.60M	493.10M	341.60M	277.90M
Total Debt	2.17B	2.17B	1.15B	1.11B	1.10B	1.01B
Total Liabilities	45.42B	35.39B	60.02B	51.78B	59.49B	32.49B
Stockholders Equity	4.73B	4.58B	4.11B	3.99B	3.71B	3.61B
Cash Flow
Free Cash Flow	610.20M	549.70M	459.70M	392.20M	390.20M	345.10M
Operating Cash Flow	692.70M	623.40M	524.90M	444.10M	441.40M	412.20M
Investing Cash Flow	-165.10M	-1.17B	-289.30M	-41.40M	-203.90M	-34.80M
Financing Cash Flow	-521.00M	562.60M	-309.20M	-292.90M	-194.80M	-304.40M

TMX Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 52.30
• 50DMA: Positive
• 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 Positive. The current price of 52.3 is above the 20-day moving average (MA) of 51.51, above the 50-day MA of 51.03, and below the 200-day MA of 53.17, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 57.34 is Neutral, neither overbought nor oversold. The STOCH value of 65.65 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
POW	76 Outperform	C$45.98B	15.03	13.24%	3.26%	-9.03%	44.14%
IAG	71 Outperform	C$16.12B	14.97	14.34%	2.16%	-25.13%	16.40%
X	70 Outperform	C$14.49B	31.48	9.87%	1.61%	-6.09%	12.76%
BAM	68 Neutral	C$117.96B	31.75	36.59%	3.40%	597.75%	50.43%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
BN	65 Neutral	C$154.68B	121.75	2.14%	0.53%	-19.04%	17.82%

TMX Group Corporate Events

TMX Group Reports Strong Q3 2025 Results and Strategic Acquisition

TMX Group Limited reported strong financial results for the third quarter of 2025, with an 18% increase in revenue to $418.6 million and a 43% rise in diluted earnings per share. The company’s growth was driven by significant increases in derivatives trading, equities markets, and contributions from its Global Insights division. TMX’s strategic focus on global growth and market excellence has resulted in a balanced business model that continues to deliver value to shareholders. Additionally, the acquisition of Verity enhances TMX Datalinx’s offerings, strengthening its position in delivering investment-grade data and insights.

TMX Group Declares $0.22 Dividend for Shareholders

TMX Group Limited has announced a dividend of $0.22 per common share, payable on November 28, 2025, to shareholders recorded by November 14, 2025. This declaration, marked as an ‘eligible dividend’ for Canadian tax purposes, reflects TMX Group’s ongoing commitment to returning value to its shareholders, potentially enhancing its attractiveness to investors.