TMX Group (X) AI Stock Analysis

• Market Cap: $14.03B
• Dividend Yield: 1.58%
• Average Volume (3M): 533.54K
• Price to Earnings (P/E): 29.1
• Beta (1Y): 0.44
• Revenue Growth: 2.56%
• EPS Growth: 35.63%
• Country: CA
• Employees: 1,803
• Sector: Financial
• Sector Strength: 77
• Industry: Capital Markets
• EPS (TTM): 1.74
• Shares Outstanding: 277,969,420
• 10 Day Avg. Volume: 679,320
• 30 Day Avg. Volume: 533,541
• PEG Ratio: 0.82
• Price to Book (P/B): N/A
• Price to Sales (P/S): 9.59
• Price to Cash Flow (P/CF): 7.70
• P/FCF Ratio: 4.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$51.49
• Price Target Upside: 0.87% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 8

TMX Group's strong financial performance and bullish technical indicators are key strengths, while the high P/E ratio suggests a relatively expensive valuation. The earnings call provided further confidence with significant revenue growth and strategic advancements. These factors collectively contribute to a robust stock score.

Positive Factors

Operating Margins

The derivatives segment has delivered approximately 60% operating margins, above TMX's consolidated margin.

Organic Growth

TMX's organic growth prospects are shifting higher, underpinned by contributions from VettaFi and consistent execution on self-help initiatives.

Volume Growth

Montréal Exchange volumes reached a record with 19.6M, indicating strong performance.

Negative Factors

TMX Group Business Overview & Revenue Model

Company Description

TMX Group is an integrated, multiasset class exchange group based in Canada with global exposure and services offered to the international financial community. TMX Group's businesses operate cash and derivatives markets for equities, fixed income, and energy, among other asset classes. The company also provides clearing facilities, data products, and other related services. The company's strategy has sought for greater operational cohesiveness to its collection of businesses. It is organized into the following business units: capital markets, derivatives and energy markets, market insights, and market solutions. The company relies heavily on trading and clearing revenue to drive its business.

How the Company Makes Money

TMX Group generates revenue through multiple streams primarily associated with its core operations in the financial markets. A significant portion of its income is derived from listing fees charged to companies that wish to be listed on its exchanges, such as the Toronto Stock Exchange and TSX Venture Exchange. The company also earns transaction fees from trading activities, which include equities, fixed income, and derivatives trading. Additionally, TMX Group provides clearing and settlement services, earning fees from clearing houses for processing trades. Another substantial revenue stream comes from selling market data and analytics services to financial institutions, providing them with essential information for trading and investment decisions. Furthermore, TMX Group's technology solutions, which include providing software and technology infrastructure to other exchanges and financial entities, contribute to its earnings. Strategic partnerships and collaborations with global financial institutions and technology providers also play a vital role in expanding its market reach and enhancing its revenue potential.

TMX Group Financial Statement Overview

Summary

TMX Group's financial performance is strong, with effective revenue growth and cash generation capabilities. The income statement shows robust gross profit margins and consistent revenue growth, albeit with some EBIT fluctuations. The balance sheet reflects a solid equity base, although total assets have varied. Cash flow is strong, with efficient cash conversion from profits.

Income Statement

The company's income statement shows a strong gross profit margin, indicating effective cost management. The net profit margin is moderate, with consistent revenue growth over the years. The EBIT and EBITDA margins indicate healthy operational performance, though there has been some fluctuation in EBIT over the period.

Balance Sheet

The balance sheet reflects a solid equity base with a stable debt-to-equity ratio. The return on equity is moderate, suggesting efficient use of equity capital. The equity ratio indicates a balanced approach to financing through equity and debt. However, the total assets have shown some variation, which could imply fluctuations in asset management.

Cash Flow

Cash flow analysis reveals a strong free cash flow growth rate, reflecting solid operational cash generation capabilities. The operating cash flow to net income ratio is strong, indicating efficient cash conversion from profits. The free cash flow to net income ratio is also healthy, suggesting good cash surplus after capital expenditures.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.46B	2.90B	1.12B	980.70M	865.10M
	Gross Profit
958.80M	2.81B	751.00M	662.60M	580.90M
	EBIT
642.30M	540.00M	1.46B	491.20M	415.90M
	EBITDA
2.46B	2.35B	1.57B	578.30M	496.20M
	Net Income Common Stockholders
481.50M	356.00M	542.70M	338.50M	279.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
433.40M	419.60M	493.10M	341.60M	277.90M
	Total Assets
40.21B	64.34B	55.98B	63.20B	36.10B
	Total Debt
2.17B	1.15B	1.11B	1.10B	1.01B
	Net Debt
1.85B	849.70M	734.10M	832.40M	784.00M
	Total Liabilities
35.39B	60.02B	51.78B	59.49B	32.49B
	Stockholders Equity
4.58B	4.11B	3.99B	3.71B	3.61B
Cash Flow		Free Cash Flow
549.70M	459.70M	392.20M	390.20M	343.80M
	Operating Cash Flow
623.40M	524.90M	444.10M	441.40M	410.90M
	Investing Cash Flow
-1.17B	-289.30M	-41.40M	-203.90M	-34.80M
	Financing Cash Flow
562.60M	-309.20M	-292.90M	-194.80M	-304.40M

TMX Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:X, the sentiment is Positive. The current price of 51.05 is above the 20-day moving average (MA) of 50.77, above the 50-day MA of 47.56, and above the 200-day MA of 43.03, indicating a bullish trend. The MACD of 0.97 indicates Positive momentum. The RSI at 59.63 is Neutral, neither overbought nor oversold. The STOCH value of 26.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:X.

TMX Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BMO	77 Outperform	$69.31B	12.67	10.01%	4.72%	15.63%	66.95%
X	74 Outperform	$14.03B	29.07	11.15%	1.58%	2.56%	35.63%
Sector *	64 Neutral	$13.79B	10.52	9.20%	4.24%	17.25%	-7.60%

TMX Group Corporate Events

TMX Group Achieves Strong Financial Growth in Q4 2024

TMX Group Limited reported a 30% increase in revenue for the fourth quarter of 2024, reaching $393.3 million, and an 87% rise in diluted earnings per share. The strong performance is attributed to organic growth and strategic acquisitions aimed at expanding its global presence and competitive advantage. The company has also announced a 5% increase in its quarterly dividend, reflecting its commitment to delivering shareholder value.

TMX Group Boosts Dividend Amidst Strategic Growth

TMX Group Limited has announced a 5% increase in its dividend to $0.20 per common share, marking the fourth such increase in two years. This decision underscores the company’s commitment to shareholder value, driven by a high-performance business model and a global strategy to accelerate growth while focusing on disciplined capital allocation and debt reduction.