We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Hold MarketAxess' (MKTX) Stock Now
Read MoreHide Full Article
MarketAxess Holdings Inc. (MKTX - Free Report) is well poised to grow on the back of strategic alliances, improving trading tools and technological improvements. Increasing total credit trading average volume is a significant growth indicator.
MarketAxess — with a market cap of $9.4 billion — is a leading multi-dealer trading platform that offers institutional investors access to liquidity in different products. It derives revenues primarily from commissions, information-related services and post-trade services.
Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth holding on to at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for MarketAxess’ 2023 earnings is pegged at $7.11 per share, which indicates 6.6% year-over-year growth. The company beat earnings estimates in all the last four quarters, with an average surprise of 4%.
The consensus estimate for 2023 revenues stands at $768.1 million, indicating 6.9% growth from 2022. Significant growth in information services revenues will likely support the upside. Our estimate for the metric suggests a more than 16% year-over-year increase.
Rising total credit trading average volume, backed by solid Eurobonds and Other Credit’s performance, is a major positive for MKTX’s business. Our estimate for the metric indicates a more than 7% year-over-year jump in 2023. Improving distribution and variable transaction fees will likely keep boosting its revenues from commissions.
Its focus on technological improvements is key for long-term success. Earlier this month, it agreed to acquire Pragma, a provider of quantitative trading technology. The move will likely aid MarketAxess in accelerating the development of analytics and execution algorithms for fixed-income products. It is also expected to assist in tapping the FX hedging solutions space for its emerging market customers.
The company’s Adaptive Auto-X solution seems to add further strength to its suite of automated trading solutions. Combined with its Composite+ pricing engine, Adaptive Auto-X is expected to improve fixed-income algorithmic trading, which will bring more clients.
MKTX’s strategic alliances are helping the company to boost its portfolio. Some of its major partnerships include those with BlackRock, S&P Dow Jones Indices, China Foreign Exchange Trade System, Tradeweb Markets and Bloomberg.
The company’s strong balance sheet enables it to support shareholder-friendly moves. It exited the second quarter with total cash and cash equivalents and investments of $396.5 million and had only $79.9 million in operating lease liabilities. It had $100 million left in its repurchase authorization in June-end.
Key Concerns
However, there are a few factors that investors should keep a careful eye on.
Its total expenses have been rising over the years, eroding margins. Our estimate for 2023 expenses indicates a nearly 9% increase from the year-ago level, due to higher marketing and advertising, technology and communications, and employee compensation and benefits costs.
Also, MarketAxess's valuation looks stretched at the current level with a forward 12-month P/E ratio of 31.7X, higher than the industry average of 23.8X. Nevertheless, we believe that a systematic and strategic plan of action will drive MKTX’s long-term growth.
The Zacks Consensus Estimate for Intercontinental Exchange’s current year earnings indicates a 6.6% year-over-year increase. It has witnessed two upward estimate revisions in the past week against no downward movement. Also, the consensus estimate for ICE’s revenues in 2023 suggests 5.3% year-over-year growth.
The Zacks Consensus Estimate for Trupanion’s current year earnings has improved 9.2% in the past 30 days. It has witnessed four upward estimate revisions during this time against no movement in the opposite direction. Also, the consensus mark for TRUP’s revenues in 2023 suggests 19.5% year-over-year growth.
The consensus mark for CME Group’s current year earnings indicates a 13.4% year-over-year jump. It has witnessed eight upward estimate revisions in the past month against no downward movement. Furthermore, the consensus estimate for CME’s revenues in 2023 suggests 8.6% year-over-year growth.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why You Should Hold MarketAxess' (MKTX) Stock Now
MarketAxess Holdings Inc. (MKTX - Free Report) is well poised to grow on the back of strategic alliances, improving trading tools and technological improvements. Increasing total credit trading average volume is a significant growth indicator.
MarketAxess — with a market cap of $9.4 billion — is a leading multi-dealer trading platform that offers institutional investors access to liquidity in different products. It derives revenues primarily from commissions, information-related services and post-trade services.
Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth holding on to at the moment.
Let’s delve deeper.
The Zacks Consensus Estimate for MarketAxess’ 2023 earnings is pegged at $7.11 per share, which indicates 6.6% year-over-year growth. The company beat earnings estimates in all the last four quarters, with an average surprise of 4%.
MarketAxess Holdings Inc. Price and EPS Surprise
MarketAxess Holdings Inc. price-eps-surprise | MarketAxess Holdings Inc. Quote
The consensus estimate for 2023 revenues stands at $768.1 million, indicating 6.9% growth from 2022. Significant growth in information services revenues will likely support the upside. Our estimate for the metric suggests a more than 16% year-over-year increase.
Rising total credit trading average volume, backed by solid Eurobonds and Other Credit’s performance, is a major positive for MKTX’s business. Our estimate for the metric indicates a more than 7% year-over-year jump in 2023. Improving distribution and variable transaction fees will likely keep boosting its revenues from commissions.
Its focus on technological improvements is key for long-term success. Earlier this month, it agreed to acquire Pragma, a provider of quantitative trading technology. The move will likely aid MarketAxess in accelerating the development of analytics and execution algorithms for fixed-income products. It is also expected to assist in tapping the FX hedging solutions space for its emerging market customers.
The company’s Adaptive Auto-X solution seems to add further strength to its suite of automated trading solutions. Combined with its Composite+ pricing engine, Adaptive Auto-X is expected to improve fixed-income algorithmic trading, which will bring more clients.
MKTX’s strategic alliances are helping the company to boost its portfolio. Some of its major partnerships include those with BlackRock, S&P Dow Jones Indices, China Foreign Exchange Trade System, Tradeweb Markets and Bloomberg.
The company’s strong balance sheet enables it to support shareholder-friendly moves. It exited the second quarter with total cash and cash equivalents and investments of $396.5 million and had only $79.9 million in operating lease liabilities. It had $100 million left in its repurchase authorization in June-end.
Key Concerns
However, there are a few factors that investors should keep a careful eye on.
Its total expenses have been rising over the years, eroding margins. Our estimate for 2023 expenses indicates a nearly 9% increase from the year-ago level, due to higher marketing and advertising, technology and communications, and employee compensation and benefits costs.
Also, MarketAxess's valuation looks stretched at the current level with a forward 12-month P/E ratio of 31.7X, higher than the industry average of 23.8X. Nevertheless, we believe that a systematic and strategic plan of action will drive MKTX’s long-term growth.
Key Picks
Some better-ranked stocks in the broader finance space are Intercontinental Exchange, Inc. (ICE - Free Report) , Trupanion, Inc. (TRUP - Free Report) and CME Group Inc. (CME - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Intercontinental Exchange’s current year earnings indicates a 6.6% year-over-year increase. It has witnessed two upward estimate revisions in the past week against no downward movement. Also, the consensus estimate for ICE’s revenues in 2023 suggests 5.3% year-over-year growth.
The Zacks Consensus Estimate for Trupanion’s current year earnings has improved 9.2% in the past 30 days. It has witnessed four upward estimate revisions during this time against no movement in the opposite direction. Also, the consensus mark for TRUP’s revenues in 2023 suggests 19.5% year-over-year growth.
The consensus mark for CME Group’s current year earnings indicates a 13.4% year-over-year jump. It has witnessed eight upward estimate revisions in the past month against no downward movement. Furthermore, the consensus estimate for CME’s revenues in 2023 suggests 8.6% year-over-year growth.