Reasonable Price-to-Earnings Ratio
Strong Price-to-Cash Flow Ratio
Strong Gross Profit Margin
High Return on Equity
Low Debt Levels
Excellent Liquidity Ratios
📈 Strong Revenue Growth
🔑 Leadership in Client-Initiated Trades
🛠️ Innovation in Trading Solutions
🚀 Growth in New Markets
💡 Continued Innovation and Product Development
High Price-to-Sales Ratio
Elevated EV/EBITDA Ratio
Moderate Net Profit Margin
Dividend Payout Ratio
📉 U.S. Credit Market Share Challenges
⚠️ Dependence on Market Conditions
Overall, MarketAxess demonstrates strong business quality through solid revenue growth, leadership in client-initiated trades, and a commitment to innovation. However, challenges in U.S. credit market share and dependence on market conditions present risks. Future prospects look promising with new market opportunities and continued product development.
Analysis Date: February 6, 2025
Last Updated: March 12, 2025
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$91.15
Current Market Price: $213.47
IV/P Ratio: 0.43x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
-134.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for MKTX
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (29.20)
P/B ratio ≤ 1.5 (5.77)
Current ratio ≥ 2.0 (4.41x)
Long-term debt < Net current assets (0.08x)
Margin of safety (-134.0%)
MKTX does not meet all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
A gross profit margin of 72.49% signifies that the company retains a significant portion of sales as gross profit, which is a positive indicator of profitability.
The return on equity of 20.23% reflects effective management and strong profitability relative to shareholders' equity.
While the net profit margin of 33.52% is strong, there could be potential for improvement compared to industry peers to maximize profitability.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
20.23%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-16)
Return on Assets (ROA)
Measures how efficiently a company uses its assets to generate profits
3.64%
Higher values indicate better asset utilization
TTM (as of 2025-04-16)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
72.49%
Higher values indicate better efficiency in production
TTM (as of 2025-04-16)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
33.52%
Higher values indicate better overall profitability
TTM (as of 2025-04-16)
The debt-to-equity ratio of 0.05 indicates that the company has very low debt, minimizing financial risk and enhancing financial stability.
The current ratio of 4.41 and quick ratio of 4.41 demonstrate that the company has ample liquidity to cover its short-term liabilities.
A dividend payout ratio of 41.10% suggests a moderate level of retained earnings for reinvestment, which could be a concern for growth if too high.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.05x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
4.41x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
MarketAxess reported a 9% growth in revenue for the year, marking the strongest annual revenue growth rate since 2020. This growth was driven by record commission revenue and record services revenue.
The company maintains a leadership position in client-initiated RFQ in U.S. credit while growing across other product areas, indicating a strong competitive advantage.
The launch of new trading solutions, such as the block trading tool and enhancements in portfolio trading, demonstrates MarketAxess's commitment to innovation which strengthens its business model.
Despite strong revenue growth, the company faced challenges in U.S. credit market share which declined in January, raising concerns about competitive pressures in that segment.
MarketAxess is set to expand its block trading solution to U.S. high grade and U.S. high yield in Q2 2025, targeting a substantial portion of the market that remains unelectronified.
The company is focused on realizing the benefits of its investments and acquisitions in 2025, with a commitment to delivering new functionalities and enhanced trading platforms.
Future performance is heavily reliant on macroeconomic factors such as interest rates and market volatility, which could impact trading activity and, consequently, revenues.