Tradeweb Markets (TW) AI Stock Analysis

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Tradeweb Markets

(NASDAQ:TW)

Rating:77Outperform

Price Target:

$158.00

▲(13.90%Upside)

Tradeweb Markets shows strong financial performance and positive earnings call sentiment, which are major strengths. However, the high P/E ratio suggests potential overvaluation, and technical indicators show mixed signals. Corporate events further support the company's leadership stability, contributing to a solid overall stock score.

Positive Factors

Market Share Gains

Market share gains of +14 bps y/y in IG credit to 17.8% and gains of +80 bps y/y in HY credit to 8.3% indicate strong performance.

Revenue Growth

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.

Volume Growth

Tradeweb Markets reported strong volume growth with total average daily volume up 34% year-over-year for the first quarter.

Negative Factors

Capture Rate Concerns

Capture rate was lower than expected, driven by mix, coming in 8% below Morgan Stanley estimates and 3% below consensus.

Market Share Issues

Credit market share was under the microscope after volume data disclosed earlier this month caused the stock to fall 11%, the largest single-day decline since 2020.

Share Price Concerns

Share price outperformance YTD and premium valuation may pose concerns for future growth.

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

Market Cap

$33.06B

Dividend Yield0.35%

Average Volume (3M)969.39K

Price to Earnings (P/E)57.4

Beta (1Y)0.47

Revenue Growth28.86%

EPS Growth29.26%

CountryUS

Employees1,412

SectorFinancial

Sector Strength74

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)0.86

Shares Outstanding116,443,380

10 Day Avg. Volume1,021,934

30 Day Avg. Volume969,390

Financial Highlights & Ratios

PEG Ratio-4.26

Price to Book (P/B)2.03

Price to Sales (P/S)0.00

P/FCF Ratio25.74

Enterprise Value/Market Cap0.19

Enterprise Value/Revenue0.96

Enterprise Value/Gross Profit4.99

Enterprise Value/Ebitda1.73

Forecast

1Y Price Target

$155.56

Price Target Upside12.14% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering10

Tradeweb Markets Business Overview & Revenue Model

Company DescriptionTradeweb Markets Inc. (TW) is a leading global operator of electronic marketplaces for rates, credit, equities, and money markets. The company provides institutional, wholesale, and retail clients with access to markets, data, and analytics, facilitating the trading of a variety of financial products, including government bonds, mortgage securities, interest rate swaps, credit derivatives, and exchange-traded funds. Tradeweb is known for its innovative technology and strong focus on improving transparency and efficiency in financial markets.

How the Company Makes MoneyTradeweb Markets generates revenue primarily through transaction fees and subscription fees. The company earns transaction fees based on the volume and value of trades executed on its platform, making its revenue somewhat dependent on market activity and trading volumes. Additionally, Tradeweb offers data and analytics services through a subscription model, providing clients with market data, trading insights, and analytical tools. The company also benefits from strategic partnerships with major financial institutions and trading networks, which help to expand its market reach and enhance its service offerings. Tradeweb's ability to maintain and grow these partnerships is a significant factor in its revenue generation and overall business strategy.

Tradeweb Markets Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 1.06%|

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 Financial Statement Overview

Summary

Tradeweb Markets demonstrates strong profitability with robust margins and efficient operations. The low debt-to-equity ratio and high equity ratio reflect a stable financial structure. While free cash flow growth shows minor fluctuations, overall cash flow management remains strong.

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.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.83B	1.73B	1.34B	1.19B	1.08B	892.66M
	Gross Profit
1.29B	1.13B	877.91M	756.36M	669.19M	543.00M
	EBIT
716.34M	678.03M	505.27M	412.57M	358.83M	263.36M
	EBITDA
1.02B	978.68M	733.33M	616.01M	542.88M	428.57M
	Net Income Common Stockholders
523.75M	501.51M	364.87M	309.34M	226.83M	166.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
361.61M	1.34B	1.71B	1.26B	972.05M	791.28M
	Total Assets
4.88B	7.27B	7.06B	6.26B	5.99B	5.68B
	Total Debt
37.31M	35.75M	27.46M	27.94M	24.33M	34.46M
	Net Debt
-324.30M	-1.30B	-1.68B	-1.23B	-947.72M	-756.82M
	Total Liabilities
283.61M	869.11M	1.13B	713.82M	681.24M	660.69M
	Stockholders Equity
4.60B	5.80B	5.37B	4.95B	4.65B	4.30B
Cash Flow		Free Cash Flow
846.79M	856.78M	684.33M	572.73M	526.67M	400.70M
	Operating Cash Flow
920.03M	897.74M	746.09M	632.82M	578.02M	443.23M
	Investing Cash Flow
-877.02M	-969.19M	-132.76M	-60.10M	-259.11M	-62.54M
	Financing Cash Flow
-282.52M	-290.26M	-168.17M	-276.70M	-136.10M	-52.69M

Tradeweb Markets Technical Analysis

Technical Analysis Sentiment

Positive

Last Price138.72

Price Trends

50DMA

138.81

Negative

100DMA

136.48

Positive

200DMA

132.56

Positive

Market Momentum

MACD

-0.86

Positive

RSI

46.84

Neutral

STOCH

55.40

Neutral

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 138.72 is below the 20-day moving average (MA) of 140.84, below the 50-day MA of 138.81, and above the 200-day MA of 132.56, indicating a neutral trend. The MACD of -0.86 indicates Positive momentum. The RSI at 46.84 is Neutral, neither overbought nor oversold. The STOCH value of 55.40 is Neutral, 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	80 Outperform	$6.58B	12.31	23.87%	2.25%	26.02%	142.79%
TW	77 Outperform	$33.06B	57.44	9.14%	0.35%	28.86%	29.26%
MKTX	75 Outperform	$8.28B	38.35	16.25%	1.38%	7.22%	-15.53%
SNEX	68 Neutral	$4.19B	14.52	16.69%	―	67.71%	19.42%
JEF	67 Neutral	$10.87B	18.26	6.38%	3.01%	16.62%	139.24%
Sector *	64 Neutral	$12.77B	9.78	7.84%	78.83%	12.06%	-7.99%
NMR	61 Neutral	$18.14B	8.38	9.88%	6.07%	8.32%	100.90%

* Financial Sector Average

Performance Comparison

Tradeweb Markets

138.72

33.35

31.65%

SNEX

StoneX Group

85.67

37.57

78.11%

JEF

Jefferies

53.22

8.56

19.17%

MKTX

Marketaxess Holdings

220.81

28.97

15.10%

NMR

Nomura Holdings

6.26

0.65

11.59%

VIRT

Virtu Financial

42.68

20.27

90.45%

Tradeweb Markets Corporate Events

Executive/Board ChangesShareholder Meetings

Tradeweb Markets Holds Annual Stockholders Meeting

Positive

May 21, 2025

On May 20, 2025, Tradeweb Markets Inc. held its Annual Meeting of Stockholders where key decisions were made. Stockholders elected Class III directors for a three-year term, ratified Deloitte & Touche LLP as the independent public accounting firm, and approved executive compensation, reflecting confidence in the company’s leadership and financial oversight.

The most recent analyst rating on (TW) stock is a Buy with a $119.00 price target. To see the full list of analyst forecasts on Tradeweb Markets stock, see the TW Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.