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3 Reasons Why Tradeweb Markets (TW) is a Solid Pick Now

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Tradeweb Markets Inc (TW - Free Report) is well poised for top-line growth, supported by volatile markets and a rise in trading activities. Hence, it seems to be a wise idea to add the stock to your portfolio now.

The company has been witnessing upward estimate revisions of late, reflecting analysts’ optimism surrounding its earnings growth potential. Over the past 60 days, the Zacks Consensus Estimate for earnings has been revised nearly 1% and 1.5% upward for 2020 and 2021, respectively. The company currently sports a Zacks Rank #1 (Strong Buy).

Its price performance seems impressive. The stock has rallied 29.3% so far this year against the industry’s decline of 26.5%.



Here are some of the factors that make Tradeweb a solid pick right now.

Earnings Growth: Its earnings are expected to grow at a rate of 67.6% for 2020 (against the projection of a decline of 23.1% for the industry) and 7.4% for 2021. Also, the company’s long-term (three to five years) estimated earnings growth rate of 16.9% promises rewards for investors.

Tradeweb has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average positive surprise being 6.6%.

Revenue Strength: Supported by persistent rise in trading activities, Tradeweb’s revenues have been witnessing a steady improvement over the last several quarters. The momentum is expected to continue in the near term on its projected sales growth rate of 13.2% and 7.6% for 2020 and 2021, respectively.

The company has a Growth Score of B. Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best upside potential.

Strong Leverage: Tradeweb’s favorable debt/equity ratio compared with the industry average reflects relatively strong financial health of the company. Thus, we believe that it will perform better than peers in an unstable business environment.

Other Key Picks

BGC Partners Inc’s earnings estimates for the current year have moved north in 60 days’ time. Further, the company’s shares have declined 51.9% over the past six months. At present, it holds a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mackinac Financial Corporation has witnessed upward earnings estimate revision for 2020 in the past 60 days. This Zacks #2 Ranked stock has depreciated 38.5% over the past six months.

GAIN Capital Holdings Inc has witnessed upward earnings estimate revision for 2020 in the past 60 days. This Zacks #2 Ranked stock has depreciated 38.5% over the past six months.

Zacks’ Single Best Pick to Double

From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
 
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.

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