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Tradeweb Markets Inc (TW)
NASDAQ:TW
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Tradeweb Markets
(NASDAQ:TW)81Outperform
Positive Factors
Growth Profile
An attractive growth profile is seen as Tradeweb Markets delivers mid-teens annual growth in revenues and earnings supported by cyclical, secular, and regulatory tailwinds and strategic actions.
Market Share Gains
The company achieved market share gains in US investment-grade and high-yield credit markets, demonstrating competitive strength.
Negative Factors
Revenue Efficiency
The capture rate was below analyst expectations, suggesting a potential challenge in revenue efficiency.
Tradeweb Markets (TW) vs. S&P 500 (SPY)
Market Cap
$31.97B
Dividend Yield0.29%
Average Volume (3M)1.15M
Price to Earnings (P/E)58.1
Beta (1Y)0.65
Revenue Growth28.97%
EPS Growth36.09%
CountryUS
Employees1,412
SectorFinancial
Sector Strength93
IndustryCapital Markets
Share Statistics
EPS (TTM)2.33
Shares Outstanding116,163,960
10 Day Avg. Volume1,209,210
30 Day Avg. Volume1,145,236
Financial Highlights & Ratios
PEG Ratio1.61
Price to Book (P/B)N/A
Price to Sales (P/S)18.36
Price to Cash Flow (P/CF)28.30
P/FCF Ratio28.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$143.40Price Target Upside7.40% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
Tradeweb Markets Business Overview & Revenue Model
Company DescriptionTradeweb Markets (TW) is a leading operator of electronic marketplaces for rates, credit, equities, and money markets. The company provides innovative trading solutions to a wide range of clients, including institutional investors, wholesale dealers, and retail investors. Tradeweb's platforms offer deep liquidity, advanced trading tools, and seamless access to global markets, facilitating efficient and transparent trading across multiple asset classes.
How the Company Makes MoneyTradeweb Markets generates revenue primarily through transaction fees, subscription fees, and data sales. The company charges transaction fees based on the volume and value of trades executed on its electronic platforms. Subscription fees are collected from users who access premium services and tools, including analytical features and market data. Additionally, Tradeweb monetizes its extensive market data offerings by selling this data to other financial institutions, enhancing their trading strategies and market insights. Partnerships with major financial institutions also play a crucial role in driving volume and liquidity on Tradeweb's platforms, further contributing to its revenue streams.
Tradeweb Markets Financial Statement Overview
Summary
Tradeweb Markets exhibits a robust financial profile with strong revenue and profit growth, low leverage, and excellent cash flow generation. Key highlights include a 28.97% revenue growth, high profit margins, and a low debt-to-equity ratio. Despite a slight concern over declining EBITDA margins and negative investing cash flows, the financial health is solid.Income Statement
Tradeweb Markets demonstrates strong revenue growth with a consistent upward trajectory, evidenced by a revenue growth rate of 28.97% from 2023 to 2024. The company maintains healthy gross and net profit margins at 64.52% and 29.06% respectively in 2024, indicating efficient cost management and solid profitability. The EBIT margin of 39.28% and EBITDA margin of 30.87% further reflect robust operational performance. Overall, the income statement reveals a well-managed and growing business, although the declining EBITDA margin over the years could be a potential area of concern.85
Very Positive
Balance Sheet
The balance sheet of Tradeweb Markets is notably strong, with a low debt-to-equity ratio of 0.01, suggesting minimal financial leverage and low risk. The equity ratio remains high at 79.80%, indicating a strong capital structure predominantly financed by equity. The return on equity stands at 8.64% for 2024, showing moderate profitability relative to shareholder equity. Overall, the company's balance sheet is characterized by high stability and low leverage, providing a solid foundation for future growth.90
Very Positive
Cash Flow
Tradeweb Markets showcases strong cash flow metrics with a healthy operating cash flow to net income ratio of 1.79 and a free cash flow to net income ratio of 1.71 in 2024, indicating efficient cash generation from operations. The free cash flow growth rate from 2023 to 2024 is 25.20%, demonstrating excellent cash flow management and growth. The company's ability to generate substantial free cash flow supports its operational and strategic flexibility, although the negative investing cash flow may warrant further analysis.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.73B | 1.34B | 1.19B | 1.08B | 892.66M | Gross Profit |
| 1.11B | 877.91M | 756.36M | 669.19M | 543.00M | EBIT |
| 678.03M | 505.27M | 412.57M | 358.83M | 263.36M | EBITDA |
| 978.68M | 733.33M | 616.01M | 542.88M | 428.57M | Net Income Common Stockholders |
| 501.51M | 364.87M | 309.34M | 226.83M | 166.30M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.34B | 1.71B | 1.26B | 972.05M | 791.28M | Total Assets |
| 7.27B | 7.06B | 6.26B | 5.99B | 5.68B | Total Debt |
| 35.75M | 27.46M | 27.94M | 24.33M | 34.46M | Net Debt |
| -1.30B | -1.68B | -1.23B | -947.72M | -756.82M | Total Liabilities |
| 869.11M | 1.13B | 713.82M | 681.24M | 660.69M | Stockholders Equity |
| 5.80B | 5.37B | 4.95B | 4.65B | 4.30B |
| Cash Flow | Free Cash Flow | |||
| 856.78M | 684.33M | 572.73M | 526.67M | 400.70M | Operating Cash Flow |
| 897.74M | 746.09M | 632.82M | 578.02M | 443.23M | Investing Cash Flow |
| -969.19M | -132.76M | -60.10M | -259.11M | -62.54M | Financing Cash Flow |
| -290.26M | -168.17M | -276.70M | -136.10M | -52.69M |
Tradeweb Markets Technical Analysis
Positive
133.52
Price Trends
130.12
Positive
131.01
Positive
121.49
Positive
Market Momentum
1.51
Negative
57.12
Neutral
70.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TW, the sentiment is Positive. The current price of 133.52 is above the 20-day moving average (MA) of 129.08, above the 50-day MA of 130.12, and above the 200-day MA of 121.49, indicating a bullish trend. The MACD of 1.51 indicates Negative momentum. The RSI at 57.12 is Neutral, neither overbought nor oversold. The STOCH value of 70.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TW.
Tradeweb Markets Risk Analysis
Tradeweb Markets disclosed 57 risk factors in its most recent earnings report. Tradeweb Markets 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
Tradeweb Markets Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $90.80B | 26.05 | 13.31% | 4.05% | 9.88% | 9.18% | |
81 Outperform | $31.97B | 58.06 | 8.65% | 0.29% | 28.97% | 36.09% | |
79 Outperform | $22.13B | 29.30 | 17.87% | 1.14% | 8.51% | 1.13% | |
77 Outperform | $97.59B | 35.52 | 9.94% | 1.04% | 15.32% | 14.02% | |
75 Outperform | $47.14B | 42.50 | 9.98% | 1.15% | 21.96% | -8.37% | |
73 Outperform | $7.46B | 27.19 | 19.74% | 1.53% | 9.06% | 6.10% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
TW
Tradeweb Markets
133.52
29.77
28.69%
CBOE
Cboe Global Markets
211.32
25.96
14.01%
CME
CME Group
251.98
42.08
20.05%
ICE
Intercontinental Exchange
169.85
32.12
23.32%
MKTX
Marketaxess Holdings
197.89
-7.13
-3.48%
NDAQ
Nasdaq
78.76
21.68
37.98%
Tradeweb Markets Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 6.76% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
Tradeweb Markets Inc. reported a record-breaking year and quarter in terms of revenue, driven by strong performances across various segments including global swaps and equities. The company successfully expanded its market presence and client relationships through strategic acquisitions. Although there were some challenges, such as a decline in retail credit revenues and a decrease in overall market share in global swaps, the positive aspects significantly outweigh the negatives. This positions Tradeweb for continued growth and innovation in the coming years.Highlights
Record Revenue Year and Quarter
Tradeweb reported the best revenue year and quarter in its history, with a 25.2% year-over-year revenue growth in the fourth quarter.
Expansion in Emerging Markets
Tradeweb expanded its developed market footprint globally and achieved over $60 million in annual EM revenues. EM swaps revenue rose over 80% year over year.
Growth in Global Swaps
Global swaps revenue grew 37% year over year, with record institutional swap revenues across European and EM swaps.
Strong Performance in Equities
Equities posted double-digit revenue growth, led by growth in global ETF and equity derivatives businesses.
Successful Acquisitions
The acquisitions of Yield Broker, RatesVIN, and ICD have deepened client relationships and expanded Tradeweb's market presence.
High Client Retention and Growth
ICD reported 99% client retention and 13% client growth, indicating strong performance post-acquisition.
Lowlights
Retail Credit Revenue Decline
Retail credit revenues were down 11% primarily due to outsized muni tax loss selling in the fourth quarter of 2023.
Decrease in Overall Market Share
Overall market share in global swaps decreased to 20.8% due to a significant drop in European swap client-related compression volumes.
Challenges in US Credit Pricing
Despite focusing on credit growth, Tradeweb is not using price adjustments to gain market share, which could limit competitiveness in the US credit market.
Company Guidance
During Tradeweb Markets Inc.'s fourth quarter 2024 earnings call, several key metrics and growth initiatives were highlighted. The company achieved record revenues of $463 million, marking a 25.2% year-over-year increase, with 40% of those revenues derived from international clients. The company reported a 29% revenue growth for the year, driven by record volumes across most asset classes. Adjusted EBITDA margins expanded by 91 basis points, and adjusted EPS grew by 29%. The CEO, Billy Hult, emphasized their strategic focus on electronification, technology investments totaling over $780 million since 2016, and continued innovation in areas such as US Treasuries, credit, and emerging markets. Looking ahead to 2025, Tradeweb forecasts adjusted expenses between $970 million and $1.03 billion and plans to continue investing in technology and market expansion, with anticipated revenue growth driven by international and non-rates businesses.Tradeweb Markets Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Tradeweb Markets Appoints New Co-Heads for Global Growth
Positive
Dec 17, 2024
Tradeweb Markets has announced the appointment of Enrico Bruni and Troy Dixon as Co-Heads of Global Markets, effective January 2025. This move, reflecting the company’s strategic focus on global growth, aims to leverage their complementary expertise to enhance Tradeweb’s market offerings and drive further expansion in its operations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.