Tradeweb Markets (TW) AI Stock Analysis

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Tradeweb Markets

(NASDAQ:TW)

77Outperform

Tradeweb Markets is performing strongly with excellent financials and positive earnings call highlights. However, the stock's valuation is high, and technical indicators suggest potential overbought conditions, balancing the overall score.

Positive Factors

Financial Performance

Tradeweb reported record ADV and revenues in the quarter as it benefits from a favorable macro backdrop and continues to take share in core markets.

Revenue Growth

Tradeweb is expected to continue performing well in this uncertain environment, projecting revenue growth of 15%-20% for the year.

Negative Factors

Credit Volume Concerns

Credit volumes are tracking 17% below consensus for the quarter.

Market Share Issues

Management flags further market share issues in April.

Tradeweb Markets (TW) vs. S&P 500 (SPY)

Market Cap

$33.54B

Dividend Yield0.3%

Average Volume (3M)1.37M

Price to Earnings (P/E)60.8

Beta (1Y)0.52

Revenue Growth28.86%

EPS Growth29.26%

CountryUS

Employees1,412

SectorFinancial

Sector Strength85

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)2.43

Shares Outstanding116,443,380

10 Day Avg. Volume1,017,896

30 Day Avg. Volume1,373,594

Financial Highlights & Ratios

PEG Ratio2.08

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.82

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit24.22

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$151.45

Price Target Upside6.76% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering12

Tradeweb Markets Business Overview & Revenue Model

Company DescriptionTradeweb Markets Inc. builds and operates electronic marketplaces in the Americas, Europe, the Middle East, Africa, Asia Pacific, and internationally. The company's marketplaces facilitate trading in a range of asset classes, including rates, credit, money markets, and equities. It offers pre-trade data and analytics, trade execution, and trade processing, as well as post-trade data, analytics, and reporting services. The company provides flexible order and trading systems to institutional investors in 45 markets across 25 currencies. It also offers a range of electronic, voice, and hybrid platforms to approximately 300 dealers and financial institutions on electronic or hybrid markets with Dealerweb platform; and trading solutions for financial advisory firms and traders with Tradeweb Direct platform. The company serves a network of approximately 2,500 clients in the institutional, wholesale, and retail client sectors. Its customers include asset managers, hedge funds, insurance companies, central banks, banks and dealers, proprietary trading firms, retail brokerage and financial advisory firms, and regional dealers. Tradeweb Markets Inc. was founded in 1996 and is headquartered in New York, New York. Tradeweb Markets Inc. is a subsidiary of Refinitiv Parent Limited.

How the Company Makes MoneyTradeweb Markets generates revenue primarily through transaction fees, subscription fees, and data sales. The company charges transaction fees based on the volume and value of trades executed on its electronic platforms. Subscription fees are collected from users who access premium services and tools, including analytical features and market data. Additionally, Tradeweb monetizes its extensive market data offerings by selling this data to other financial institutions, enhancing their trading strategies and market insights. Partnerships with major financial institutions also play a crucial role in driving volume and liquidity on Tradeweb's platforms, further contributing to its revenue streams.

Tradeweb Markets Financial Statement Overview

Summary

Tradeweb Markets shows strong financial health with robust revenue, profit margins, and a solid balance sheet. The low debt-to-equity ratio and efficient cash flow management further enhance its financial performance.

Income Statement

Very Positive

Tradeweb Markets has demonstrated strong revenue growth with a TTM growth rate of 20.06% compared to the previous year. The gross profit margin is robust at 70.23%, and the net profit margin is solid at 28.67%. EBIT and EBITDA margins are also healthy at 39.22% and 48.68%, respectively. These metrics indicate efficient operations and strong profitability.

Balance Sheet

Very Positive

The company maintains a very low debt-to-equity ratio of 0.005, showcasing minimal leverage risk. Return on Equity (ROE) is solid at 8.82%, supported by a strong equity position. The equity ratio of 80.57% indicates a very stable financial structure with a majority of assets financed by equity, minimizing risk.

Cash Flow

Very Positive

Tradeweb Markets exhibits a strong operating cash flow to net income ratio of 1.76, indicating excellent cash generation. The free cash flow to net income ratio is similarly robust at 1.62, with a slight decline in free cash flow growth of -1.17%. Overall, cash flow management remains strong despite minor fluctuations.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.73B	1.34B	1.19B	1.08B	892.66M
	Gross Profit
1.13B	877.91M	756.36M	669.19M	543.00M
	EBIT
678.03M	505.27M	412.57M	358.83M	263.36M
	EBITDA
978.68M	733.33M	616.01M	542.88M	428.57M
	Net Income Common Stockholders
501.51M	364.87M	309.34M	226.83M	166.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.34B	1.71B	1.26B	972.05M	791.28M
	Total Assets
7.27B	7.06B	6.26B	5.99B	5.68B
	Total Debt
35.75M	27.46M	27.94M	24.33M	34.46M
	Net Debt
-1.30B	-1.68B	-1.23B	-947.72M	-756.82M
	Total Liabilities
869.11M	1.13B	713.82M	681.24M	660.69M
	Stockholders Equity
5.80B	5.37B	4.95B	4.65B	4.30B
Cash Flow		Free Cash Flow
856.78M	684.33M	572.73M	526.67M	400.70M
	Operating Cash Flow
897.74M	746.09M	632.82M	578.02M	443.23M
	Investing Cash Flow
-969.19M	-132.76M	-60.10M	-259.11M	-62.54M
	Financing Cash Flow
-290.26M	-168.17M	-276.70M	-136.10M	-52.69M

Tradeweb Markets Technical Analysis

Technical Analysis Sentiment

Positive

Last Price141.86

Price Trends

50DMA

136.60

Positive

100DMA

133.17

Positive

200DMA

127.91

Positive

Market Momentum

MACD

0.56

Negative

RSI

61.25

Neutral

STOCH

94.79

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TW, the sentiment is Positive. The current price of 141.86 is above the 20-day moving average (MA) of 133.02, above the 50-day MA of 136.60, and above the 200-day MA of 127.91, indicating a bullish trend. The MACD of 0.56 indicates Negative momentum. The RSI at 61.25 is Neutral, neither overbought nor oversold. The STOCH value of 94.79 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TW.

Tradeweb Markets Risk Analysis

Tradeweb Markets disclosed 57 risk factors in its most recent earnings report. Tradeweb Markets 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

Tradeweb Markets Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIRT	81 Outperform	$6.35B	11.87	23.87%	2.41%	26.02%	142.79%
MKTX	78 Outperform	$8.40B	31.01	20.45%	1.33%	9.06%	6.10%
TW	77 Outperform	$33.54B	60.84	9.14%	0.30%	28.86%	29.26%
SNEX	70 Outperform	$4.47B	16.65	16.40%	―	60.57%	17.39%
Sector *	64 Neutral	$12.65B	9.74	8.04%	17044.64%	12.65%	-5.11%
NMR	61 Neutral	$16.15B	7.57	9.88%	4.51%	8.32%	100.90%
JEF	59 Neutral	$10.16B	17.07	6.38%	2.97%	16.62%	139.24%

* Financial Sector Average

Performance Comparison

Tradeweb Markets

141.86

32.98

30.29%

SNEX

StoneX Group

92.81

41.67

81.48%

JEF

Jefferies

49.27

4.66

10.45%

MKTX

Marketaxess Holdings

225.68

22.61

11.13%

NMR

Nomura Holdings

5.56

-0.31

-5.28%

VIRT

Virtu Financial

41.16

19.10

86.58%

Tradeweb Markets Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 3.26%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong revenue growth and record-breaking achievements across various segments, indicating robust business performance. However, challenges such as declines in retail credit revenues and fee per million rates, as well as reduced swap compression volumes, were noted. Despite these challenges, the positive highlights significantly outweighed the lowlights.

Q1-2025 Updates

Positive Updates

Record Revenue Achievement

Tradeweb reported the best revenue quarter in its history, surpassing $500 million in quarterly revenues for the first time, indicating strong business performance.

Double-Digit Revenue Growth

The company achieved a 24.7% year-over-year revenue growth on a reported basis, with significant growth across various segments like equities and global swaps.

Expansion in Global Markets

International clients contributed to 40% of revenues, with emerging markets credit revenues growing nearly 20% year-over-year. Additionally, global swaps revenues grew over 40% year-over-year.

Improvement in EBITDA Margins

Adjusted EBITDA margins expanded by 88 basis points compared to the first quarter of 2024, showcasing improved profitability.

Strengthening in U.S. Treasuries and ETFs

Tradeweb saw record revenues in U.S. Treasuries and ETFs, with U.S. Treasury market share reaching 23% and ETF business reaching record revenues due to increased volatility.

Negative Updates

Retail Credit Revenue Decline

Retail credit revenues were down 20% year-over-year due to a risk-off tone among retail investors amid rising macro uncertainty.

Fee Per Million Declines

Average fees per million for certain products decreased, including an 8% decline for cash rate products and an 11% decrease for cash credit, impacting revenue from these streams.

Challenges in Compression Volumes

Total market share in global swaps declined from 22% to 21% due to a significant reduction in U.S. and European client-related compression volumes.

Company Guidance

During Tradeweb's First Quarter 2025 Earnings Conference Call, the company reported a record revenue of $510 million, reflecting a 24.7% year-over-year increase. The adjusted EBITDA margin expanded by 88 basis points compared to the first quarter of 2024. In terms of business segments, the rates division saw record revenues driven by growth in swaps, global government bonds, and mortgages. The credit business experienced high single-digit revenue growth, with double-digit gains in credit derivatives and municipal bonds. The equities segment also posted double-digit revenue growth, led by global ETF and equity derivatives businesses. Money markets benefited from the addition of ICD and record revenues in global repos. Tradeweb's market data revenues were bolstered by the LSEG market data contract and proprietary data products. The company's U.S. Treasuries market share reached a quarterly record of 23%, while the equities business saw volatility increase over 50% during the quarter. Additionally, in the credit segment, the company achieved a record 9% block share in fully electronic U.S. investment-grade trading. Overall, Tradeweb is focused on expanding market share across asset classes and continues to invest in growth and innovation, with a particular emphasis on technology and partnerships.

Tradeweb Markets Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Tradeweb Markets Appoints New Co-Heads for Global Growth

Positive

Dec 17, 2024

Tradeweb Markets has announced the appointment of Enrico Bruni and Troy Dixon as Co-Heads of Global Markets, effective January 2025. This move, reflecting the company’s strategic focus on global growth, aims to leverage their complementary expertise to enhance Tradeweb’s market offerings and drive further expansion in its operations.

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.