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Momentum

Michael Vodicka

MarketAxess Holdings, Inc.

MKTX

 ZacksTrade Now

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MarketAxess Holdings, Inc. (MKTX - Snapshot Report) just spiked into a new all-time high after reporting another great quarter that included a 21% earnings surprise. With estimates on the rise and a bullish growth projection, this Zacks #1 Rank stock provides access to momentum.

Company Description

MarketAxess Holdings, Inc. operates as an electronic trading platform that enables investment industry professionals to trade corporate bonds and other fixed-income products. The company was founded in 2000 and has a market cap of $1.08 billion.

With trading volumes spiking on recent market volatility, MarkerAxess has been doing well in a tough market. That showed up on October 26 when the company reported strong Q3 results that came in well ahead of expectations.

Third-Quarter Results

Revenue for the period was up 24% from last year to $47 million. Earnings also came in strong at 34 cents, 21% ahead of the Zacks Consensus Estimate, where the company has an average earnings surprise of 17% over the last four quarters.

The good quarter was driven by increased trading volume, where commission revenue was up 29% from last year to $40 million.

Financial Profile

MarketAxess has used its earnings momentum to strengthen its balance sheet, with cash and equivalents up $49 million from last year to $158 million while total debt fell $44 million to $19 million.

Estimates

We saw some solid movement in estimates off the good quarter, with the current year adding 9 cents to $1.23 while the next-year estimate added 26 cents to $1.45, a bullish 18% growth projection.

Valuation

With a PEG ratio of 1.33, MKTX trades at a premium to the benchmark of 1 for value.

12-Month Chart

On the chart, shares jumped into a new all-time high in early November on the good quarter. Look for support from the trend line on any weakness, take a look below.

Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Whisper Trader Service.

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