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Marketaxess Holdings (MKTX)
NASDAQ:MKTX
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Marketaxess Holdings
(NASDAQ:MKTX)
Rating:75Outperform
Price Target:
$243.00
▲( 11.54% Upside)
Positive Factors
Innovations and Products
MKTX is bringing new products, protocols, and innovation to the marketplace at an accelerating pace that can support structural market share gains as they electronify credit markets.
Market Share and Volumes
Volumes accelerated on the back of elevated volatility with credit ADV up significantly year-over-year, suggesting positive momentum and increased market share.
Negative Factors
Credit Fee Performance
Credit fees per million for 1Q25 were lower than previous quarter and below estimates, due to a shift in product and protocol mix.
Fee Rate Challenges
Lower fee capture is expected due to a protocol and product mix shift towards lower-fee products, as well as lower duration across the platform.
Marketaxess Holdings (MKTX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.17B
Dividend Yield1.38%
Average Volume (3M)530.66K
Price to Earnings (P/E)37.8
Beta (1Y)0.24
Revenue Growth7.22%
EPS Growth-15.53%
CountryUS
Employees891
SectorFinancial
Sector Strength82
IndustryFinancial - Capital Markets
Share Statistics
EPS (TTM)1.87
Shares Outstanding37,501,660
10 Day Avg. Volume611,879
30 Day Avg. Volume530,664
Financial Highlights & Ratios
PEG Ratio-19.97
Price to Book (P/B)5.87
Price to Sales (P/S)0.00
P/FCF Ratio25.53
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$238.75Price Target Upside9.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Marketaxess Holdings Business Overview & Revenue Model
Company DescriptionMarketAxess Holdings Inc. is a leading financial technology company operating in the electronic trading sector, primarily facilitating the trading of fixed-income securities. Established in 2000 and headquartered in New York City, the company provides an electronic trading platform that connects institutional investors and broker-dealers, enabling them to trade corporate bonds and other fixed-income instruments efficiently. MarketAxess is recognized for its advanced technology solutions and data-driven insights, which enhance transparency and liquidity in the fixed-income markets.
How the Company Makes MoneyMarketAxess makes money primarily through transaction fees charged on trades executed via its electronic platform. These fees are generally a percentage of the notional value of the trade. The company also generates revenue from data services, offering market data products that provide valuable insights and analytics to clients. Moreover, MarketAxess benefits from subscription fees for access to its trading platform and additional tools. The company's earnings are bolstered by strategic partnerships with financial institutions and by expanding its service offerings to new markets and products, such as emerging market bonds and municipal bonds.
Marketaxess Holdings Key Performance Indicators (KPIs)
Any
Average Daily Volume by Type
Measures the trading volume across different types of securities, indicating market activity levels and potential revenue streams.
Measures the trading volume across different types of securities, indicating market activity levels and potential revenue streams.
Data provided by:
Main Street Data
Main Street DataMarketaxess Holdings Financial Statement Overview
Summary
Marketaxess Holdings showcases strong financial health with impressive revenue growth, solid profitability metrics, and effective cash flow management. The company's low leverage and strong capital structure provide stability, while the consistent generation of free cash flow enhances its capacity for future investments. Potential areas for improvement include maintaining EBIT growth and monitoring equity growth rates.Income Statement
Marketaxess Holdings has demonstrated strong revenue growth with a significant increase from $511.35 million in 2019 to $817.10 million in 2024, indicating a robust upward trajectory. The gross profit margin is consistently high, maintaining above 60% in recent years, with a notable EBIT margin around 40% and improving EBITDA margins. The net profit margin remains stable, reflecting strong profitability, although the slight decline in EBIT from 2020 requires monitoring.85
Very Positive
Balance Sheet
The company's financial leverage is low with a debt-to-equity ratio consistently below 0.1, indicating prudent financial management. The equity ratio is strong, reflecting a solid capital structure with equity financing prevailing. While the return on equity (ROE) is consistently healthy, a slight decrease in equity growth could impact future gains.78
Positive
Cash Flow
Marketaxess Holdings exhibits a strong free cash flow growth, enhancing from $231.23 million in 2019 to $375.30 million in 2024, reinforcing financial flexibility. The operating cash flow to net income ratio is strong, suggesting efficient cash conversion from earnings. However, cash flow from investing activities is negative, reflecting ongoing capital investments.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 817.10M | 752.55M | 718.30M | 698.95M | 689.13M | Gross Profit |
| 566.53M | 482.92M | 536.20M | 528.03M | 532.24M | EBIT |
| 340.87M | 315.02M | 326.88M | 337.24M | 374.73M | EBITDA |
| 432.77M | 395.10M | 393.97M | 397.51M | 417.57M | Net Income Common Stockholders |
| 274.18M | 258.06M | 250.22M | 257.89M | 299.38M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 649.25M | 550.96M | 430.75M | 506.74M | 460.86M | Total Assets |
| 1.79B | 2.02B | 1.61B | 1.53B | 1.33B | Total Debt |
| 72.65M | 79.68M | 82.68M | 88.42M | 93.61M | Net Debt |
| -471.82M | -371.60M | -348.07M | -418.31M | -367.25M | Total Liabilities |
| 400.56M | 722.10M | 526.68M | 489.14M | 376.37M | Stockholders Equity |
| 1.39B | 1.29B | 1.08B | 1.04B | 955.06M |
| Cash Flow | Free Cash Flow | |||
| 375.30M | 281.32M | 237.36M | 231.47M | 358.86M | Operating Cash Flow |
| 385.24M | 333.77M | 289.23M | 282.09M | 404.49M | Investing Cash Flow |
| -86.94M | -155.29M | -86.27M | -67.69M | 68.87M | Financing Cash Flow |
| -201.38M | -147.06M | -242.38M | -189.78M | -145.11M |
Marketaxess Holdings Technical Analysis
Negative
217.85
Price Trends
217.50
Positive
212.75
Positive
233.94
Negative
Market Momentum
-0.06
Positive
49.16
Neutral
45.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKTX, the sentiment is Negative. The current price of 217.85 is below the 20-day moving average (MA) of 220.37, above the 50-day MA of 217.50, and below the 200-day MA of 233.94, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 49.16 is Neutral, neither overbought nor oversold. The STOCH value of 45.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MKTX.
Marketaxess Holdings Risk Analysis
Marketaxess Holdings disclosed 13 risk factors in its most recent earnings report. Marketaxess Holdings 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 3 New Risks
1.
Risk Factors Summary Q4, 2024
2.
Credit and Operational Risks Q4, 2024
3.
Risks Related to Possible Transactions or Investments Q4, 2024
Marketaxess Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $6.28B | 11.75 | 23.87% | 2.34% | 26.02% | 142.79% | |
80 Outperform | $34.43B | 59.82 | 9.14% | 0.29% | 28.86% | 29.26% | |
75 Outperform | $8.17B | 37.83 | 16.25% | 1.38% | 7.22% | -15.53% | |
73 Outperform | $87.36B | 28.53 | 19.26% | 0.48% | 14.67% | 23.59% | |
69 Neutral | $9.69B | 17.97 | 11.48% | 1.82% | 12.85% | 20.21% | |
64 Neutral | $12.64B | 9.78 | 7.67% | 17015.08% | 12.23% | -6.02% | |
59 Neutral | $9.99B | 16.78 | 6.38% | 2.86% | 16.62% | 139.24% |
* Financial Sector Average
Performance Comparison
MKTX
Marketaxess Holdings
217.85
14.23
6.99%
IBKR
Interactive Brokers
206.61
78.84
61.70%
JEF
Jefferies
48.42
3.62
8.08%
SF
Stifel Financial
93.13
14.17
17.95%
VIRT
Virtu Financial
40.75
18.35
81.92%
TW
Tradeweb Markets
145.62
35.42
32.14%
Marketaxess Holdings Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -4.49%|
Next Earnings Date:Jul 16, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several strong areas of growth, particularly in emerging markets, automation, and portfolio trading, along with successful share repurchases. However, challenges remain, including a decline in U.S. credit commission revenue and a slight overall revenue decrease. The establishment of a new tax reserve also adds financial uncertainty.Q1-2025 Updates
Positive Updates
Strong Growth in U.S. Government Bonds
Achieved a single-day trading record of $102 billion on April 9, with clients leveraging rates algos to execute $36 billion or 11% of the week's trading volume.
Record International and New Product Revenue
Record commission revenue in international and new product areas, including emerging markets, municipals, and U.S. government bonds.
Growth in Automation and Algo Usage
Record trade volumes of $110 billion, up 17%, with 249 active automation clients and 80 clients enabled for the Algo suite, up 25% from the prior year.
Strong Portfolio and Dealer-Initiated Trading
Record total Portfolio Trading (PT) ADV of $1.3 billion and record U.S. credit PT ADV of $1.1 billion. Dealer RFQ and Mid-X ADV was a record $1.9 billion, representing a 45% increase.
Increase in Market Volatility Driving Record Trading ADV
Trading ADV grew 68% year-over-year to a record $57 billion, with a 32% growth in total credit ADV and 93% growth in total rates ADV.
Successful Share Repurchase Program
Repurchased 251,000 shares year-to-date for a total of $52 million, with $173 million remaining on the board authorization.
Negative Updates
Decline in U.S. Credit Commission Revenue
U.S. credit commission revenue decreased by 7%, driven by lower fee per million and lower market share.
Lower Total Revenue Year-Over-Year
Total revenue was $209 million, compared to $210 million in the prior year, with a 2% decrease in commission revenue.
Establishment of New Tax Reserve
A new reserve was established for uncertain tax positions due to a recent ruling, leading to an increase in the expected effective tax rate to 41%-42% on a GAAP basis.
Company Guidance
In the MarketAxess first quarter 2025 earnings call, CEO Chris Concannon highlighted significant achievements driven by strategic initiatives and technological investments. The company recorded a single-day trading record of $102 billion in U.S. government bonds on April 9, bolstered by increased client use of rates algorithms with a 97% passive execution rate. Total trading ADV reached a record $57 billion in April, with U.S. credit and rates growing 32% and 93% year-over-year, respectively. The firm also saw a 42% increase in municipal bonds ADV, and dealer RFQ and Mid-X ADV reached a record $1.9 billion, up 45%. Despite a 2% decrease in total revenue to $209 million, MarketAxess achieved 7% growth in services revenue and maintained expense growth at 2%. The company also announced plans to roll out an enhanced RFQ solution and a high-touch block trading solution, aiming to further capture market share and adapt to the evolving trading environment.Marketaxess Holdings Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
MarketAxess Appoints Dean Berry as COO and CEO
Positive
May 21, 2025
On May 21, 2025, MarketAxess Holdings Inc. announced the appointment of Dean Berry as Group Chief Operating Officer and Chief Executive Officer for EMEA & APAC, effective in the fourth quarter of 2025. Berry, with extensive experience in electronic trading and financial markets, is expected to drive innovation and efficiency across MarketAxess’s global operations, enhancing its industry positioning and potentially benefiting stakeholders through improved trading solutions.
The most recent analyst rating on (MKTX) stock is a Hold with a $223.00 price target. To see the full list of analyst forecasts on Marketaxess Holdings stock, see the MKTX Stock Forecast page.
Business Operations and StrategyFinancial Disclosures
MarketAxess Reports Q1 2025 Financial Results
Neutral
May 7, 2025
On May 7, 2025, MarketAxess Holdings announced its financial results for the first quarter of 2025, highlighting record trading volumes across various product areas despite a slight decline in total revenues compared to the previous year. The company reported a decrease in U.S. credit commission revenue, offset by growth in emerging markets and Eurobonds, and emphasized its strategic advancements in trading capabilities to enhance market share in U.S. credit.
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.