What makes MarketAxess (MKTX) an attractive bet for investors?
MarketAxess Investments Inc. MKTX looks an attractive bet, given its continued strong operational performance in recent quarters, the launch of new products and services, and recent acquisition announcements, which are raising optimism about its long-term outlook.
Since the start of the year, this stock currently Zacks Rank # 2 (Buy) has jumped 47.3% from the 8.4% increase in its industry. You can see The full list of Zacks # 1 Rank (Strong Buy) stocks today here.
Let’s take a closer look at the factors that make this stock a must-have choice for investors right now.
Estimates of benefits to the north: MarketAxess ‘annual estimates have been revised upward over the past 60 days, instilling analysts’ confidence in the stock. During that time, Zacks’ consensus estimate for current year earnings climbed 2.9% to $ 7.7.
Given the wealth of information at their disposal, it is in the best interests of investors to be guided by the advice of brokers and the direction of their estimate revisions. This is because the direction of estimate revisions serves as an important indicator when it comes to determining the price of a stock.
Strong prospects: Zacks’ consensus estimate for MarketAxess current year earnings shows a 42.78% improvement over the number reported from the previous year. The same is also higher than the industry’s expected profit growth rate of 14.8%.
The storyline is also impressive when it comes to income. For 2020, Zacks’ consensus estimate for the company’s revenue is $ 681.97 million, which implies a 33.4% growth from the figure released a year ago. year.
Awesome story of the winning surprise: MarketAxess has a stellar surprise profit record. Net income has beaten Zacks’ consensus estimate in each of the past four quarters, averaging 2.71%.
Higher operating profit: MarketAxess’ 12-month rolling return on equity (ROE) strengthens its growth potential. The company’s ROE of 33.4% has improved over the past four years and is above the industry average of 11.7%. This increase also reflects its efficiency in the use of its shareholders’ funds.
Commercial tailwinds: The company’s total trading volumes have grown in recent years and the same increase in the first nine months of 2020 Investment in technology, unveiling of trading platforms, open trading and acquisitions have led to this rise.
The business is gaining ground through automation and credit trading. Automated transaction volumes reached over $ 30 billion in the third quarter, up 33% year-on-year. As the market increasingly adopts electronic trading solutions, the company will continue to see substantial progress in its automated trading capabilities.
Another achievement is the company’s acquisition of Liquidity Edge, which provided it with an attractive entry point into the US Treasury bond market.
The company is in the process of purchasing MuniBrokers and Deutsche Börse Regulatory Reporting Hub. The purchase of the Regulatory Reporting Center will help further expand MarketAxess’ post-trade reporting and pre-trade and post-trade data services to a wider European customer base, particularly in Germany, France and the Nordic region . The acquisition of MuniBrokers will expand the company’s existing municipal bond trading solution for global institutional investors and broker clients.
New product initiatives, such as Live Markets and Mid-X, are driving innovation and will help the company strengthen its global presence. Live Markets aim to bring new liquidity to credit markets and reduce trade friction through efficient technology designed to improve liquidity and improve transaction costs. Mid-X, launched in October, offers fully anonymous matchmaking sessions and saves customers money. The first session attracted a mix of brokers and investor clients.
The company’s strong growth in its commodities, superior financial model, large and growing addressable market, significant operating leverage, and an expanded suite of electronic trading protocols bode well for the long term.
Other brokerage firms in the same space including Intercontinental Exchange Inc. ICE and Nasdaq, Inc. The NDAQ gained 9.6% and 9.3% respectively, while Groupe CME inc. CME lost 1.4% over the same period.
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MarketAxess Holdings Inc. (MKTX): Free Stock Analysis Report
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