TMX Group (X) AI Stock Analysis

• Market Cap: $15.52B
• Dividend Yield: 1.36%
• Average Volume (3M): 544.09K
• Price to Earnings (P/E): 34.8
• Beta (1Y): 0.47
• Revenue Growth: -2.24%
• EPS Growth: 10.14%
• Country: CA
• Employees: 2,039
• Sector: Financial
• Sector Strength: 82
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 0.48
• Shares Outstanding: 278,051,880
• 10 Day Avg. Volume: 476,046
• 30 Day Avg. Volume: 544,089
• PEG Ratio: 1.59
• Price to Book (P/B): 3.10
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.99
• 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: $56.75
• Price Target Upside: 2.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 80 Outperform
• Price Target: C$63.00 ▲(13.72%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

Market Leadership

TMX remains the top pick with organic growth moving higher combined with business diversification that can help weather volatile markets.

Organic Growth

TMX's organic growth prospects are shifting higher underpinned by contributions from VettaFi and consistent execution on self-help initiatives.

Resilient Business Model

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

Negative Factors

Capital Formation Challenges

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

Trade Uncertainty

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

TMX Group Business Overview & Revenue Model

Company Description

TMX Group Limited is a leading Canadian financial services company headquartered in Toronto, Ontario. It operates cash and derivative markets for multiple asset classes including equities, fixed income, and energy. Core services are provided through its primary subsidiaries, including the Toronto Stock Exchange (TSX), TSX Venture Exchange, and Montreal Exchange, among others. TMX Group is instrumental in facilitating the exchange of capital, providing listing services, trading, clearing, settlement, and depository services to a diverse range of market participants.

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's financial performance is strong, with effective revenue growth and cash generation capabilities. The income statement shows robust gross profit margins and consistent revenue growth, albeit with some EBIT fluctuations. The balance sheet reflects a solid equity base, although total assets have varied. Cash flow is strong, with efficient cash conversion from profits.

Income Statement

The company's income statement shows a strong gross profit margin, indicating effective cost management. The net profit margin is moderate, with consistent revenue growth over the years. The EBIT and EBITDA margins indicate healthy operational performance, though there has been some fluctuation in EBIT over the period.

Balance Sheet

The balance sheet reflects a solid equity base with a stable debt-to-equity ratio. The return on equity is moderate, suggesting efficient use of equity capital. The equity ratio indicates a balanced approach to financing through equity and debt. However, the total assets have shown some variation, which could imply fluctuations in asset management.

Cash Flow

Cash flow analysis reveals a strong free cash flow growth rate, reflecting solid operational cash generation capabilities. The operating cash flow to net income ratio is strong, indicating efficient cash conversion from profits. The free cash flow to net income ratio is also healthy, suggesting good cash surplus after capital expenditures.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.46B	2.90B	1.12B	980.70M	865.10M
	Gross Profit
958.80M	2.81B	751.00M	662.60M	580.90M
	EBIT
642.30M	540.00M	1.46B	491.20M	415.90M
	EBITDA
2.46B	2.35B	1.57B	578.30M	496.20M
	Net Income Common Stockholders
481.50M	356.00M	542.70M	338.50M	279.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
433.40M	419.60M	493.10M	341.60M	277.90M
	Total Assets
40.21B	64.34B	55.98B	63.20B	36.10B
	Total Debt
2.17B	1.15B	1.11B	1.10B	1.01B
	Net Debt
1.85B	849.70M	734.10M	832.40M	784.00M
	Total Liabilities
35.39B	60.02B	51.78B	59.49B	32.49B
	Stockholders Equity
4.58B	4.11B	3.99B	3.71B	3.61B
Cash Flow		Free Cash Flow
549.70M	459.70M	392.20M	390.20M	343.80M
	Operating Cash Flow
623.40M	524.90M	444.10M	441.40M	410.90M
	Investing Cash Flow
-1.17B	-289.30M	-41.40M	-203.90M	-34.80M
	Financing Cash Flow
562.60M	-309.20M	-292.90M	-194.80M	-304.40M

TMX Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 55.40
• 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 55.4 is above the 20-day moving average (MA) of 55.34, above the 50-day MA of 53.48, and above the 200-day MA of 47.16, indicating a bullish trend. The MACD of 0.62 indicates Positive momentum. The RSI at 53.20 is Neutral, neither overbought nor oversold. The STOCH value of 46.74 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	$15.52B	34.82	10.06%	1.36%	-2.24%	10.14%
IAG	77 Outperform	C$13.04B	14.80	12.54%	2.51%	-7.31%	28.65%
POW	72 Outperform	C$33.38B	12.27	11.92%	4.45%	7.63%	8.84%
BAM	69 Neutral	C$124.76B	39.70	18.95%	2.94%	27.17%	16.13%
BN	65 Neutral	$130.51B	191.88	1.36%	0.57%	-16.50%	-50.14%
Sector *	64 Neutral	$12.77B	9.77	7.59%	16985.66%	12.30%	-7.71%

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.