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MarketAxess (MKTX) to Report Q2 Earnings: What's in the Cards?
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MarketAxess Holdings Inc. (MKTX - Free Report) is scheduled to release second-quarter 2023 results on Jul 20, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for MarketAxess’ second-quarter earnings per share (EPS) is pegged at $1.61, which indicates a decline of 9.6% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $184 million, implying a rise of 1.1% from the year-ago quarter’s reported number.
Earnings Surprise History
MarketAxess boasts a solid earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 4.28%. This is depicted in the chart below:
In the second quarter, the top line of MarketAxess is expected to have benefited on the back of improved credit commission revenues, which in turn, are likely to have stemmed from strong estimated market share gains across most of its credit product lines. However, the upside is likely to have been partly offset by a decline in average fee capture resulting from lower duration of U.S. high grade bonds traded on MKTX’s platform.
The Zacks Consensus Estimate for total commissions is pegged at $165 million, suggesting 1.2% growth from the prior-year quarter’s reported number. Our estimate indicates the metric to be $170.2 million for the second quarter.
A strong international business, higher trading volumes from new client segments coupled with growing information services revenues are likely to have acted as other revenue drivers for MKTX in the to-be-reported quarter. The consensus mark for information services revenues indicates 15.5% growth from the prior-year quarter’s reported number.
The trading volumes of MarketAxess are expected to have witnessed an uptick in the second quarter, attributable to increased adoption of its automation tools. Increased trading volumes are likely to have contributed to transaction fee growth for MKTX in the to-be-reported quarter.
The Zacks Consensus Estimate for variable transaction fees is pegged at $133 million, implying growth of 0.8% from the prior-year quarter’s figure. Our estimate suggests the metric to be $136.3 million.
However, the margins of MarketAxess are likely to have taken a hit in the second quarter resulting from continued investments to advance trading system and data capabilities. Increased headcount in technology and customer facing roles with an aim to bolster revenue growth initiatives is expected to have escalated employee compensation and benefits expense. Our estimate indicates total expenses to rise 9.4% year over year to $106.6 million in the to-be-reported quarter.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for MarketAxess this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you see below.
Earnings ESP: MarketAxess has an Earnings ESP of -1.62% because the Most Accurate Estimate of $1.58 is pegged lower than the Zacks Consensus Estimate of $1.61. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: MKTX currently carries a Zacks Rank of 3.
Stocks to Consider
While an earnings beat looks uncertain for MarketAxess, here are some companies from the Finance space, which according to our model, have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for BAP’s second-quarter 2023 earnings is pegged at $4.38 per share, indicating a rise of 16.8% from the prior-year quarter’s reported figure.
The consensus mark for Credicorp’s second-quarter earnings has moved 1.6% north over the past 60 days.
Main Street Capital Corporation (MAIN - Free Report) has an Earnings ESP of +3.29% and a Zacks Rank of 2, currently. The Zacks Consensus Estimate for MAIN’s second-quarter 2023 earnings is pegged at 99 cents per share, suggesting 32% growth from the year-ago quarter’s reported figure.
Main Street Capital’s bottom line beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 7.29%.
First Citizens BancShares, Inc. (FCNCA - Free Report) has an Earnings ESP of +3.21% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for FCNCA’s second-quarter 2023 earnings is pegged at $45.91 per share, indicating a nearly three-fold increase from the prior-year quarter’s reported figure.
First Citizens BancShares’ earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 2.89%.
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MarketAxess (MKTX) to Report Q2 Earnings: What's in the Cards?
MarketAxess Holdings Inc. (MKTX - Free Report) is scheduled to release second-quarter 2023 results on Jul 20, before the opening bell.
Q2 Estimates
The Zacks Consensus Estimate for MarketAxess’ second-quarter earnings per share (EPS) is pegged at $1.61, which indicates a decline of 9.6% from the prior-year quarter’s reported figure.
The consensus mark for revenues stands at $184 million, implying a rise of 1.1% from the year-ago quarter’s reported number.
Earnings Surprise History
MarketAxess boasts a solid earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average surprise being 4.28%. This is depicted in the chart below:
MarketAxess Holdings Inc. Price and EPS Surprise
MarketAxess Holdings Inc. price-eps-surprise | MarketAxess Holdings Inc. Quote
Factors to Note
In the second quarter, the top line of MarketAxess is expected to have benefited on the back of improved credit commission revenues, which in turn, are likely to have stemmed from strong estimated market share gains across most of its credit product lines. However, the upside is likely to have been partly offset by a decline in average fee capture resulting from lower duration of U.S. high grade bonds traded on MKTX’s platform.
The Zacks Consensus Estimate for total commissions is pegged at $165 million, suggesting 1.2% growth from the prior-year quarter’s reported number. Our estimate indicates the metric to be $170.2 million for the second quarter.
A strong international business, higher trading volumes from new client segments coupled with growing information services revenues are likely to have acted as other revenue drivers for MKTX in the to-be-reported quarter. The consensus mark for information services revenues indicates 15.5% growth from the prior-year quarter’s reported number.
The trading volumes of MarketAxess are expected to have witnessed an uptick in the second quarter, attributable to increased adoption of its automation tools. Increased trading volumes are likely to have contributed to transaction fee growth for MKTX in the to-be-reported quarter.
The Zacks Consensus Estimate for variable transaction fees is pegged at $133 million, implying growth of 0.8% from the prior-year quarter’s figure. Our estimate suggests the metric to be $136.3 million.
However, the margins of MarketAxess are likely to have taken a hit in the second quarter resulting from continued investments to advance trading system and data capabilities. Increased headcount in technology and customer facing roles with an aim to bolster revenue growth initiatives is expected to have escalated employee compensation and benefits expense. Our estimate indicates total expenses to rise 9.4% year over year to $106.6 million in the to-be-reported quarter.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for MarketAxess this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you see below.
Earnings ESP: MarketAxess has an Earnings ESP of -1.62% because the Most Accurate Estimate of $1.58 is pegged lower than the Zacks Consensus Estimate of $1.61. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: MKTX currently carries a Zacks Rank of 3.
Stocks to Consider
While an earnings beat looks uncertain for MarketAxess, here are some companies from the Finance space, which according to our model, have the right combination of elements to beat on earnings this time around:
Credicorp Ltd. (BAP - Free Report) has an Earnings ESP of +1.75% and a Zacks Rank of 1, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BAP’s second-quarter 2023 earnings is pegged at $4.38 per share, indicating a rise of 16.8% from the prior-year quarter’s reported figure.
The consensus mark for Credicorp’s second-quarter earnings has moved 1.6% north over the past 60 days.
Main Street Capital Corporation (MAIN - Free Report) has an Earnings ESP of +3.29% and a Zacks Rank of 2, currently. The Zacks Consensus Estimate for MAIN’s second-quarter 2023 earnings is pegged at 99 cents per share, suggesting 32% growth from the year-ago quarter’s reported figure.
Main Street Capital’s bottom line beat estimates in three of the trailing four quarters and matched the mark once, the average surprise being 7.29%.
First Citizens BancShares, Inc. (FCNCA - Free Report) has an Earnings ESP of +3.21% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for FCNCA’s second-quarter 2023 earnings is pegged at $45.91 per share, indicating a nearly three-fold increase from the prior-year quarter’s reported figure.
First Citizens BancShares’ earnings beat estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 2.89%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.