Marketaxess Holdings (MKTX) AI Stock Analysis

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Marketaxess Holdings

(NASDAQ:MKTX)

Rating:70Outperform

Price Target:

$239.00

▲(9.15%Upside)

Marketaxess Holdings displays financial stability and strong profitability, supported by strategic growth in trading volumes and technological investments. However, technical indicators suggest bearish momentum and potential overvaluation risks. Earnings call insights are positive, highlighting strategic growth, but challenges such as declining U.S. credit commission revenue and a new tax reserve must be addressed to sustain growth.

Positive Factors

Market Performance

Credit volume strength persisting with IG credit share stability and stable fee capture should support the stock that's underperforming peers.

Product Innovation

MKTX is launching new products and innovations at an accelerating pace, supporting potential structural market share gains.

Negative Factors

Market Share Decline

US HG and HY market share declined year-over-year, indicating challenges in maintaining market position.

Revenue Challenges

Lower fee capture is expected due to a shift towards lower-fee products, impacting revenue potential.

Marketaxess Holdings (MKTX) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$8.13B

Dividend Yield1.4%

Average Volume (3M)456.89K

Price to Earnings (P/E)37.7

Beta (1Y)0.22

Revenue Growth7.22%

EPS Growth-15.53%

CountryUS

Employees891

SectorFinancial

Sector Strength78

IndustryFinancial - Capital Markets

Share Statistics

EPS (TTM)1.87

Shares Outstanding37,501,660

10 Day Avg. Volume357,194

30 Day Avg. Volume456,892

Financial Highlights & Ratios

PEG Ratio-14.37

Price to Book (P/B)9.67

Price to Sales (P/S)0.00

P/FCF Ratio44.02

Enterprise Value/Market Cap1.24

Enterprise Value/Revenue3.13

Enterprise Value/Gross Profit17.89

Enterprise Value/Ebitda6.04

Forecast

1Y Price Target

$242.25

Price Target Upside10.63% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Marketaxess Holdings Business Overview & Revenue Model

Company DescriptionMarketAxess Holdings Inc. is a leading financial technology company that operates a global electronic trading platform for fixed-income securities. It primarily serves institutional investors and broker-dealers, facilitating the trading of corporate bonds, emerging markets bonds, and other types of fixed-income products. The company is headquartered in New York City and is recognized for its innovative solutions that enhance trading efficiency, transparency, and liquidity in the fixed-income markets.

How the Company Makes MoneyMarketAxess generates revenue through its electronic trading platform by charging commission fees on the trades executed by its clients. The company offers a range of trading protocols, including request-for-quote (RFQ) and all-to-all trading, allowing participants to trade directly with one another. These commissions are typically charged based on the volume and value of the trades. Additionally, MarketAxess earns revenue from its post-trade services, which include trade matching, regulatory reporting, and data analytics. The company's robust data and analytics tools provide valuable insights for clients, contributing to its revenue streams. Strategic partnerships with financial institutions and technology providers also play a significant role in its earnings by enhancing platform capabilities and expanding its client base.

Marketaxess Holdings Key Performance Indicators (KPIs)

Any

Average Daily Volume by Type

Average Daily Volume by Type
Monitors trading volumes across different product types, indicating market activity levels and the company's ability to capture trading demand.

Chart InsightsMarketAxess is experiencing robust growth in trading volumes, particularly in the Rates segment, which surged 93% year-over-year, reflecting increased client adoption of rates algorithms. Credit volumes also show a positive trend, with a recent uptick. Despite a slight revenue dip, strategic investments in automation and new trading solutions are driving record trading activity, positioning the company well for future growth. However, challenges such as declining U.S. credit commission revenue and new tax reserves pose potential risks.

Data provided by:

Main Street Data

Marketaxess Holdings Earnings Call Summary

Earnings Call Date:May 07, 2025

(Q1-2025)

% Change Since: -4.00%|

Next Earnings Date:Jul 16, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted several strong areas of growth, particularly in emerging markets, automation, and portfolio trading, along with successful share repurchases. However, challenges remain, including a decline in U.S. credit commission revenue and a slight overall revenue decrease. The establishment of a new tax reserve also adds financial uncertainty.

Q1-2025 Updates

Positive Updates

Strong Growth in U.S. Government Bonds

Achieved a single-day trading record of $102 billion on April 9, with clients leveraging rates algos to execute $36 billion or 11% of the week's trading volume.

Record International and New Product Revenue

Record commission revenue in international and new product areas, including emerging markets, municipals, and U.S. government bonds.

Growth in Automation and Algo Usage

Record trade volumes of $110 billion, up 17%, with 249 active automation clients and 80 clients enabled for the Algo suite, up 25% from the prior year.

Strong Portfolio and Dealer-Initiated Trading

Record total Portfolio Trading (PT) ADV of $1.3 billion and record U.S. credit PT ADV of $1.1 billion. Dealer RFQ and Mid-X ADV was a record $1.9 billion, representing a 45% increase.

Increase in Market Volatility Driving Record Trading ADV

Trading ADV grew 68% year-over-year to a record $57 billion, with a 32% growth in total credit ADV and 93% growth in total rates ADV.

Successful Share Repurchase Program

Repurchased 251,000 shares year-to-date for a total of $52 million, with $173 million remaining on the board authorization.

Negative Updates

Decline in U.S. Credit Commission Revenue

U.S. credit commission revenue decreased by 7%, driven by lower fee per million and lower market share.

Lower Total Revenue Year-Over-Year

Total revenue was $209 million, compared to $210 million in the prior year, with a 2% decrease in commission revenue.

Establishment of New Tax Reserve

A new reserve was established for uncertain tax positions due to a recent ruling, leading to an increase in the expected effective tax rate to 41%-42% on a GAAP basis.

Company Guidance

In the MarketAxess first quarter 2025 earnings call, CEO Chris Concannon highlighted significant achievements driven by strategic initiatives and technological investments. The company recorded a single-day trading record of $102 billion in U.S. government bonds on April 9, bolstered by increased client use of rates algorithms with a 97% passive execution rate. Total trading ADV reached a record $57 billion in April, with U.S. credit and rates growing 32% and 93% year-over-year, respectively. The firm also saw a 42% increase in municipal bonds ADV, and dealer RFQ and Mid-X ADV reached a record $1.9 billion, up 45%. Despite a 2% decrease in total revenue to $209 million, MarketAxess achieved 7% growth in services revenue and maintained expense growth at 2%. The company also announced plans to roll out an enhanced RFQ solution and a high-touch block trading solution, aiming to further capture market share and adapt to the evolving trading environment.

Marketaxess Holdings Financial Statement Overview

Summary

Marketaxess Holdings shows strong profitability and financial stability with low leverage and efficient cash flow management. However, there are challenges in revenue growth and net profit margins, which slightly decreased.

Income Statement

Positive

Marketaxess Holdings shows a solid gross profit margin of approximately 69% and an EBIT margin of 41% TTM, indicating strong profitability. However, the net profit margin decreased to 27% TTM from 34% in the previous year, reflecting a slight decline in net efficiency. Revenue growth is modest, with a recent decline of 0.3% TTM, suggesting potential revenue stabilization challenges.

Balance Sheet

Very Positive

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.05 and a high equity ratio of 72% TTM, indicating financial stability and low leverage. Return on equity of 16% TTM shows effective utilization of equity to generate profits, although slightly lower than 20% last year.

Cash Flow

Positive

Marketaxess Holdings demonstrates robust cash flow management, with an operating cash flow to net income ratio of 1.9 TTM, indicating efficient cash generation. Free cash flow decreased slightly by 2.1% TTM, pointing to stable but slightly declining cash availability for reinvestment or shareholder returns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	814.94M	817.10M	752.55M	718.30M	698.95M	689.13M
Gross Profit	564.50M	566.53M	482.92M	536.20M	528.03M	532.24M
EBITDA	424.31M	432.77M	395.10M	393.97M	397.51M	417.57M
Net Income	216.63M	274.18M	258.06M	250.22M	257.89M	299.38M
Balance Sheet
Total Assets	1.88B	1.79B	2.02B	1.61B	1.53B	1.33B
Cash, Cash Equivalents and Short-Term Investments	486.22M	649.25M	550.96M	430.75M	506.74M	460.86M
Total Debt	70.80M	72.65M	79.68M	82.68M	88.42M	93.61M
Total Liabilities	530.78M	400.56M	722.10M	526.68M	489.14M	376.37M
Stockholders Equity	1.35B	1.39B	1.29B	1.08B	1.04B	955.06M
Cash Flow
Free Cash Flow	367.58M	375.30M	281.32M	237.36M	231.47M	358.86M
Operating Cash Flow	410.95M	385.24M	333.77M	289.23M	282.09M	404.49M
Investing Cash Flow	-79.19M	-86.94M	-155.29M	-86.27M	-67.69M	68.87M
Financing Cash Flow	-225.90M	-201.38M	-147.06M	-242.38M	-189.78M	-145.11M

Marketaxess Holdings Technical Analysis

Technical Analysis Sentiment

Negative

Last Price218.97

Price Trends

50DMA

220.67

Negative

100DMA

214.79

Positive

200DMA

230.72

Negative

Market Momentum

MACD

-0.44

Positive

RSI

47.63

Neutral

STOCH

36.95

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKTX, the sentiment is Negative. The current price of 218.97 is below the 20-day moving average (MA) of 221.62, below the 50-day MA of 220.67, and below the 200-day MA of 230.72, indicating a bearish trend. The MACD of -0.44 indicates Positive momentum. The RSI at 47.63 is Neutral, neither overbought nor oversold. The STOCH value of 36.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MKTX.

Marketaxess Holdings Risk Analysis

Marketaxess Holdings disclosed 13 risk factors in its most recent earnings report. Marketaxess Holdings reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Marketaxess Holdings Peers Comparison

Overall Rating

UnderperformOutperform

Sector (69)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VIRT	81 Outperform	$6.60B	12.34	23.87%	2.23%	26.02%	142.79%
IBKR	79 Outperform	$25.21B	32.53	19.26%	0.55%	14.67%	23.60%
TW	76 Outperform	$32.30B	55.33	9.14%	0.35%	28.86%	29.26%
SF	73 Outperform	$11.15B	20.89	11.48%	1.70%	12.85%	20.21%
MKTX	70 Outperform	$8.13B	37.65	16.25%	1.40%	7.22%	-15.53%
Sector *	69 Neutral	€15.24B	11.73	14.88%	5.87%	7.26%	0.13%
JEF	67 Neutral	$11.28B	20.70	5.75%	2.92%	1.00%	46.98%

* Financial Sector Average

Performance Comparison

MKTX

Marketaxess Holdings

218.97

2.24

1.03%

IBKR

Interactive Brokers

58.92

27.94

90.19%

JEF

Jefferies

55.69

2.02

3.76%

Stifel Financial

109.60

25.58

30.45%

VIRT

Virtu Financial

44.05

21.59

96.13%

Tradeweb Markets

134.68

28.38

26.70%

Marketaxess Holdings Corporate Events

Executive/Board ChangesShareholder Meetings

MarketAxess Holds 2025 Annual Stockholders Meeting

Neutral

Jun 5, 2025

On June 2, 2025, MarketAxess Holdings Inc. announced the appointment of Nitin A. Mirwani as Chief Accounting Officer, effective June 23, 2025. This strategic move is expected to strengthen the company’s financial leadership. Additionally, on June 4, 2025, the company held its 2025 Annual Meeting of Stockholders, where key proposals, including the election of directors and the ratification of PricewaterhouseCoopers LLP as the independent auditor, were voted upon. The meeting saw a significant shareholder turnout, with 88.3% of shares represented.

The most recent analyst rating on (MKTX) stock is a Hold with a $202.00 price target. To see the full list of analyst forecasts on Marketaxess Holdings stock, see the MKTX Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy

MarketAxess Appoints Dean Berry as COO and CEO

Positive

May 21, 2025

On May 21, 2025, MarketAxess Holdings Inc. announced the appointment of Dean Berry as Group Chief Operating Officer and Chief Executive Officer for EMEA & APAC, effective in the fourth quarter of 2025. Berry, with extensive experience in electronic trading and financial markets, is expected to drive innovation and efficiency across MarketAxess’s global operations, enhancing its industry positioning and potentially benefiting stakeholders through improved trading solutions.

The most recent analyst rating on (MKTX) stock is a Hold with a $223.00 price target. To see the full list of analyst forecasts on Marketaxess Holdings stock, see the MKTX Stock Forecast page.

Business Operations and StrategyFinancial Disclosures

MarketAxess Reports Q1 2025 Financial Results

Neutral

May 7, 2025

On May 7, 2025, MarketAxess Holdings announced its financial results for the first quarter of 2025, highlighting record trading volumes across various product areas despite a slight decline in total revenues compared to the previous year. The company reported a decrease in U.S. credit commission revenue, offset by growth in emerging markets and Eurobonds, and emphasized its strategic advancements in trading capabilities to enhance market share in U.S. credit.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 09, 2025