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MarketAxess (MKTX) Acquires Pragma to Drive Trade Efficiency
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MarketAxess Holdings Inc. (MKTX - Free Report) recently entered into an agreement to acquire Pragma, a provider of quantitative trading technology. Pragma specializes in analytical and algorithmic services in fixed-income, Foreign Exchange and equities space. MarketAxess aims to leverage Pragma’s technology to boost the efficiency of its trading platform.
This acquisition would help MarketAxess achieve a higher contribution of commissions to total revenues in the future. Commissions contributed 88.2% to total revenues in the second quarter of 2023. Earlier this year, MarketAxess executed its first client algorithmic trade using technology Adaptive Auto-X. Pragma’s platform and technology will aid MKTX in accelerating the development of analytics and execution algorithms for its fixed-income products.
MarketAxess’s acquisition of Pragma would also assist in tapping the FX hedging solutions space for its emerging market clients. This move implies that MarketAxess does not shy away from growing inorganically to accelerate its business growth. MKTX is committed to innovating and providing clients with greater efficiency, thereby increasing their loyalty toward its products. This will also mean the trading outcomes of clients will improve due to algorithmic and AI-driven trading.
The company aims to expand its global client franchise and solidify its footprint in the fixed-income space, which seems to be an attractive asset class given the high rates prevailing. Through Pragma’s technology, clients will be able to outsource trading strategies to an AI-driven algorithm, hence driving efficient trading transactions.
Pragma’s trading solutions have powered hedge funds, asset managers, banks etc., across the world. In 2022, $2 trillion of algorithmic order flow was handled by Pragma on behalf of clients spread over 50 venues. Moreover, Pragma continues to improve the quality of execution, which makes its business model stronger and differentiates its products. This acquisition resulted from the shared mission to use technology to improve trading outcomes and efficiency.
Zacks Rank & Price Performance
MarketAxess currently has a Zacks Rank #3 (Hold).
The company’s shares have lost 4.1% in the past month against the 7.1% rise of the industry it belongs to.
CME Group earnings surpassed estimates in each of the last four quarters, the average surprise being 2.9%. The Zacks Consensus Estimate for CME’s 2023 earnings suggests an improvement of 13.6%, while the same for revenues suggests growth of 8.8% from the respective year-ago reported figures. The consensus mark for CME’s 2023 earnings has moved 3.3% north in the past 30 days.
The bottom line of Coinbase Global outpaced estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 36.2%. The Zacks Consensus Estimate for COIN’s 2023 suggests growth of 81.2% from the respective year-ago reported figure. The same for revenues is pegged at $2.8 billion for 2023.
Intercontinental Exchange’s earnings surpassed estimates in three of the last four quarters, missing once, the average surprise being 2.1%. The Zacks Consensus Estimate for ICE’s 2023 earnings suggests an improvement of 6%, while the same for revenues suggests growth of 5.5% from the respective year-ago reported figures. The consensus mark for ICE’s 2023 earnings has moved 0.7% north in the past seven days.
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MarketAxess (MKTX) Acquires Pragma to Drive Trade Efficiency
MarketAxess Holdings Inc. (MKTX - Free Report) recently entered into an agreement to acquire Pragma, a provider of quantitative trading technology. Pragma specializes in analytical and algorithmic services in fixed-income, Foreign Exchange and equities space. MarketAxess aims to leverage Pragma’s technology to boost the efficiency of its trading platform.
This acquisition would help MarketAxess achieve a higher contribution of commissions to total revenues in the future. Commissions contributed 88.2% to total revenues in the second quarter of 2023. Earlier this year, MarketAxess executed its first client algorithmic trade using technology Adaptive Auto-X. Pragma’s platform and technology will aid MKTX in accelerating the development of analytics and execution algorithms for its fixed-income products.
MarketAxess’s acquisition of Pragma would also assist in tapping the FX hedging solutions space for its emerging market clients. This move implies that MarketAxess does not shy away from growing inorganically to accelerate its business growth. MKTX is committed to innovating and providing clients with greater efficiency, thereby increasing their loyalty toward its products. This will also mean the trading outcomes of clients will improve due to algorithmic and AI-driven trading.
The company aims to expand its global client franchise and solidify its footprint in the fixed-income space, which seems to be an attractive asset class given the high rates prevailing. Through Pragma’s technology, clients will be able to outsource trading strategies to an AI-driven algorithm, hence driving efficient trading transactions.
Pragma’s trading solutions have powered hedge funds, asset managers, banks etc., across the world. In 2022, $2 trillion of algorithmic order flow was handled by Pragma on behalf of clients spread over 50 venues. Moreover, Pragma continues to improve the quality of execution, which makes its business model stronger and differentiates its products. This acquisition resulted from the shared mission to use technology to improve trading outcomes and efficiency.
Zacks Rank & Price Performance
MarketAxess currently has a Zacks Rank #3 (Hold).
The company’s shares have lost 4.1% in the past month against the 7.1% rise of the industry it belongs to.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the Securities and Exchanges space are CME Group Inc. (CME - Free Report) , Coinbase Global, Inc. (COIN - Free Report) and Intercontinental Exchange, Inc. (ICE - Free Report) . Each of these companies currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CME Group earnings surpassed estimates in each of the last four quarters, the average surprise being 2.9%. The Zacks Consensus Estimate for CME’s 2023 earnings suggests an improvement of 13.6%, while the same for revenues suggests growth of 8.8% from the respective year-ago reported figures. The consensus mark for CME’s 2023 earnings has moved 3.3% north in the past 30 days.
The bottom line of Coinbase Global outpaced estimates in two of the trailing four quarters and missed the mark twice, the average surprise being 36.2%. The Zacks Consensus Estimate for COIN’s 2023 suggests growth of 81.2% from the respective year-ago reported figure. The same for revenues is pegged at $2.8 billion for 2023.
Intercontinental Exchange’s earnings surpassed estimates in three of the last four quarters, missing once, the average surprise being 2.1%. The Zacks Consensus Estimate for ICE’s 2023 earnings suggests an improvement of 6%, while the same for revenues suggests growth of 5.5% from the respective year-ago reported figures. The consensus mark for ICE’s 2023 earnings has moved 0.7% north in the past seven days.