MarketAxess Holdings Inc. MKTX benefits from solid trading volumes, acquisitions and collaborations, a well-established Open Trading platform and robust cash-generating abilities.   

MKTX’s Zacks Rank & Price Performance

MarketAxess carries a Zacks Rank #2 (Buy) at present. 

The stock has gained 20.6% in the past year.

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Robust Growth Prospects of MarketAxess

The Zacks Consensus Estimate for MarketAxess’ 2024 earnings is pegged at $7.37 per share, indicating a year-over-year improvement of 7.6% from the 2023 figure. The consensus mark for revenues is pegged at $827.5 million, implying a year-over-year increase of 10% from the 2023 figure.

The consensus estimate for 2025 earnings is pegged at $8.20 per share, indicating a year-over-year increase of 11.3% from the 2024 estimate. The consensus estimate for 2025 revenues is pegged at $923 million, implying a year-over-year improvement of 11.5% from the 2024 estimate.

Northbound Estimate Revision of MKTX

The Zacks Consensus Estimate for 2024 earnings has been revised upward 1.5% in the past 30 days.

MKTX’s Impressive Earnings Surprise History

MKTX’s earnings beat estimates in each of the trailing four quarters, the average surprise being 4.24%.

Solid Return on Equity of MarketAxess

The return on equity for MKTX is 20.9%, which is higher than the industry average of 13.3%. This substantiates the company’s efficiency in utilizing shareholders’ funds.

MKTX’s Business Tailwinds

MarketAxess has consistently benefited from solid trading volumes, which remain the most significant driver of its revenues. The company’s top line has shown steady growth for over a decade, a noteworthy achievement. In the first nine months of 2024, commissions advanced 9% year over year, supported by an average daily trading volume of $35.8 billion. 

MarketAxess' diversified product offerings, including U.S. High Grade, U.S. High Yield, Eurobond, Emerging Markets and Municipal Bonds, provide a reliable revenue stream. Management continues to focus on capturing additional market share in U.S. credit markets. 

The company leverages acquisitions and partnerships to enhance its product portfolio, explore new markets and expand its footprint in fixed-income trading. This September, MarketAxess announced an expansion of its 10-year-long partnership with BlackRock. Under this expanded partnership, MKTX’s credit trading protocols, data and pricing will be integrated into BlackRock’s Aladdin order execution management system.

Its Open Trading platform plays a pivotal role by offering price improvements to clients, reducing risks in fixed-income markets and lowering transaction costs. In the first nine months of 2024, Open Trading credit volume was $782.2 billion, which improved 10.7% from the prior-year  period. 

Beyond its domestic operations, MarketAxess serves a broad international clientele, with more than 1,000 active firms utilizing its platform through regulated venues in Europe, Asia and Latin America. 

A robust financial position supports MarketAxess' growth initiatives. As of Sept. 30, 2024, the company’s cash and cash equivalents were $446.3 million. It generated $209 million in net cash from operations during the nine months ended Sept. 30, 2024, which advanced 8.8% from the prior-year period. Strong cash flows enable the company to invest in its business while also returning value to shareholders through share buybacks and dividends. In January 2024, the company approved a 2.8% increase in its quarterly dividend.

Other Stocks to Consider

Some other top-ranked stocks in the Finance space are BrightSphere Investment Group Inc. BSIG, First Savings Financial Group, Inc. FSFG and Northrim BanCorp, Inc. NRIM, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

BrightSphere Investment’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 20.07%. The Zacks Consensus Estimate for BSIG’s 2024 earnings indicates a rise of 45.5%, while the consensus mark for revenues implies growth of 16.6% from the corresponding year-ago figures. The consensus mark for BSIG’s 2024 earnings has moved 12.1% north in the past 60 days.

The bottom line of First Savings Financial beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 11.60%. The Zacks Consensus Estimate for FSFG’s 2024 earnings implies an improvement of 55.9%, while the consensus mark for revenues indicates growth of 8.5% from the corresponding year-ago figures. The consensus mark for FSFG’s 2024 earnings has moved 20.5% north in the past 60 days.

Northrim BanCorp’s earnings outpaced estimates in three of the last four quarters and missed the mark once, the average surprise being 15.80%. The Zacks Consensus Estimate for NRIM’s 2024 earnings indicates an improvement of 42.1%, while the consensus mark for revenues implies growth of 18.5% from the corresponding year-ago figures.  The consensus mark for NRIM’s 2024 earnings has moved 9.4% north in the past 30 days.

Shares of BrightSphere Investment, First Savings Financial and Northrim BanCorp have gained 73.1%, 101.4% and 67%, respectively, in the past year.

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