MARKETAXESS HOLDINGS INC (MKTX) Stock Fundamental Analysis
NASDAQ:MKTX - Nasdaq - US57060D1081 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to MKTX. MKTX was compared to 232 industry peers in the Capital Markets industry. Both the health and profitability get an excellent rating, making MKTX a very profitable company, without any liquidiy or solvency issues. While showing a medium growth rate, MKTX is valued expensive at the moment. These ratings would make MKTX suitable for quality investing!
1. Profitability
1.1 Basic Checks
MKTX had positive earnings in the past year.
In the past year MKTX had a positive cash flow from operations.
In the past 5 years MKTX has always been profitable.
In the past 5 years MKTX always reported a positive cash flow from operatings.
1.2 Ratios
MKTX's Return On Assets of 11.53% is amongst the best of the industry. MKTX outperforms 91.81% of its industry peers.
MKTX has a better Return On Equity (16.08%) than 78.88% of its industry peers.
MKTX's Return On Invested Capital of 19.13% is amongst the best of the industry. MKTX outperforms 95.26% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MKTX is significantly above the industry average of 7.88%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.53% | ||
| ROE | 16.08% | ||
| ROIC | 19.13% |
ROA(3y)14.56%
ROA(5y)16.61%
ROE(3y)20.95%
ROE(5y)23.79%
ROIC(3y)20.18%
ROIC(5y)23.06%
1.3 Margins
MKTX's Profit Margin of 26.57% is fine compared to the rest of the industry. MKTX outperforms 67.24% of its industry peers.
MKTX's Profit Margin has declined in the last couple of years.
The Operating Margin of MKTX (41.30%) is better than 71.55% of its industry peers.
MKTX's Operating Margin has declined in the last couple of years.
The Gross Margin of MKTX (88.97%) is better than 92.67% of its industry peers.
In the last couple of years the Gross Margin of MKTX has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 41.3% | ||
| PM (TTM) | 26.57% | ||
| GM | 88.97% |
OM growth 3Y-4.74%
OM growth 5Y-3.2%
PM growth 3Y-3.1%
PM growth 5Y-3.48%
GM growth 3Y-1.77%
GM growth 5Y-1.24%
2. Health
2.1 Basic Checks
Compared to 1 year ago, MKTX has less shares outstanding
MKTX has less shares outstanding than it did 5 years ago.
There is no outstanding debt for MKTX. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
An Altman-Z score of 12.05 indicates that MKTX is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 12.05, MKTX belongs to the best of the industry, outperforming 94.83% of the companies in the same industry.
MKTX has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 12.05 |
ROIC/WACCN/A
WACCN/A
2.3 Liquidity
A Current Ratio of 2.31 indicates that MKTX has no problem at all paying its short term obligations.
The Current ratio of MKTX (2.31) is better than 74.57% of its industry peers.
MKTX has a Quick Ratio of 2.31. This indicates that MKTX is financially healthy and has no problem in meeting its short term obligations.
MKTX has a Quick ratio of 2.31. This is in the better half of the industry: MKTX outperforms 74.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.31 |
3. Growth
3.1 Past
MKTX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.27%.
Measured over the past 5 years, MKTX shows a small growth in Earnings Per Share. The EPS has been growing by 6.13% on average per year.
The Revenue has been growing slightly by 7.33% in the past year.
The Revenue has been growing by 9.82% on average over the past years. This is quite good.
EPS 1Y (TTM)2.27%
EPS 3Y2.4%
EPS 5Y6.13%
EPS Q2Q%-2.6%
Revenue 1Y (TTM)7.33%
Revenue growth 3Y5.33%
Revenue growth 5Y9.82%
Sales Q2Q%-0.83%
3.2 Future
The Earnings Per Share is expected to grow by 11.07% on average over the next years. This is quite good.
Based on estimates for the next years, MKTX will show a small growth in Revenue. The Revenue will grow by 7.82% on average per year.
EPS Next Y4.74%
EPS Next 2Y9.7%
EPS Next 3Y12.55%
EPS Next 5Y11.07%
Revenue Next Year5.92%
Revenue Next 2Y7.87%
Revenue Next 3Y9.01%
Revenue Next 5Y7.82%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 31.20, MKTX can be considered very expensive at the moment.
MKTX's Price/Earnings ratio is a bit more expensive when compared to the industry. MKTX is more expensive than 73.71% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.31. MKTX is around the same levels.
MKTX is valuated quite expensively with a Price/Forward Earnings ratio of 25.75.
Based on the Price/Forward Earnings ratio, MKTX is valued a bit more expensive than the industry average as 65.09% of the companies are valued more cheaply.
MKTX's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.13.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.2 | ||
| Fwd PE | 25.75 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MKTX is valued a bit cheaper than 72.41% of the companies in the same industry.
MKTX's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.37 | ||
| EV/EBITDA | 19.39 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
MKTX has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as MKTX's earnings are expected to grow with 12.55% in the coming years.
PEG (NY)6.58
PEG (5Y)5.09
EPS Next 2Y9.7%
EPS Next 3Y12.55%
5. Dividend
5.1 Amount
MKTX has a Yearly Dividend Yield of 1.34%. Purely for dividend investing, there may be better candidates out there.
MKTX's Dividend Yield is slightly below the industry average, which is at 7.98.
Compared to an average S&P500 Dividend Yield of 2.40, MKTX's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.34% |
5.2 History
On average, the dividend of MKTX grows each year by 8.13%, which is quite nice.
MKTX has paid a dividend for at least 10 years, which is a reliable track record.
MKTX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.13%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
52.02% of the earnings are spent on dividend by MKTX. This is a bit on the high side, but may be sustainable.
The dividend of MKTX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP52.02%
EPS Next 2Y9.7%
EPS Next 3Y12.55%
225.25
-1.64 (-0.72%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryCapital Markets
Earnings (Last)
Earnings (Next)
Inst Owners101.88%
Inst Owner Change-0.61%
Ins Owners0.67%
Ins Owner Change1.24%
Market Cap8.45B
Analysts73
Price Target239.42 (6.29%)
Short Float %2.87%
Short Ratio1.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.34% |
Yearly Dividend2.98
Dividend Growth(5Y)8.13%
DP52.02%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.21%
Min EPS beat(2)1.08%
Max EPS beat(2)1.35%
EPS beat(4)4
Avg EPS beat(4)0.93%
Min EPS beat(4)0.42%
Max EPS beat(4)1.35%
EPS beat(8)6
Avg EPS beat(8)2.38%
EPS beat(12)9
Avg EPS beat(12)2.16%
EPS beat(16)11
Avg EPS beat(16)1.53%
Revenue beat(2)0
Avg Revenue beat(2)-2.86%
Min Revenue beat(2)-3.23%
Max Revenue beat(2)-2.49%
Revenue beat(4)0
Avg Revenue beat(4)-2.48%
Min Revenue beat(4)-3.23%
Max Revenue beat(4)-1.74%
Revenue beat(8)0
Avg Revenue beat(8)-2.64%
Revenue beat(12)0
Avg Revenue beat(12)-2.36%
Revenue beat(16)0
Avg Revenue beat(16)-2.43%
PT rev (1m)1.93%
PT rev (3m)1.25%
EPS NQ rev (1m)-0.05%
EPS NQ rev (3m)4.04%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.98%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)2.57%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)0.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.2 | ||
| Fwd PE | 25.75 | ||
| P/S | 10.36 | ||
| P/FCF | 23.37 | ||
| P/OCF | 20.12 | ||
| P/B | 6.27 | ||
| P/tB | 8.31 | ||
| EV/EBITDA | 19.39 |
EPS(TTM)7.22
EY3.21%
EPS(NY)8.75
Fwd EY3.88%
FCF(TTM)9.64
FCFY4.28%
OCF(TTM)11.2
OCFY4.97%
SpS21.74
BVpS35.93
TBVpS27.1
PEG (NY)6.58
PEG (5Y)5.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.53% | ||
| ROE | 16.08% | ||
| ROCE | 24.9% | ||
| ROIC | 19.13% | ||
| ROICexc | 29.86% | ||
| ROICexgc | 48.35% | ||
| OM | 41.3% | ||
| PM (TTM) | 26.57% | ||
| GM | 88.97% | ||
| FCFM | 44.33% |
ROA(3y)14.56%
ROA(5y)16.61%
ROE(3y)20.95%
ROE(5y)23.79%
ROIC(3y)20.18%
ROIC(5y)23.06%
ROICexc(3y)32.58%
ROICexc(5y)40.71%
ROICexgc(3y)54.23%
ROICexgc(5y)74.41%
ROCE(3y)26.28%
ROCE(5y)30.03%
ROICexcg growth 3Y-19.3%
ROICexcg growth 5Y-4.85%
ROICexc growth 3Y-13.78%
ROICexc growth 5Y-4.25%
OM growth 3Y-4.74%
OM growth 5Y-3.2%
PM growth 3Y-3.1%
PM growth 5Y-3.48%
GM growth 3Y-1.77%
GM growth 5Y-1.24%
F-Score7
Asset Turnover0.43
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 79.02% | ||
| Cap/Sales | 7.16% | ||
| Interest Coverage | 226.92 | ||
| Cash Conversion | 102.24% | ||
| Profit Quality | 166.85% | ||
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.31 | ||
| Altman-Z | 12.05 |
F-Score7
WACCN/A
ROIC/WACCN/A
Cap/Depr(3y)78.49%
Cap/Depr(5y)91.38%
Cap/Sales(3y)7.04%
Cap/Sales(5y)7%
Profit Quality(3y)107.91%
Profit Quality(5y)106.67%
High Growth Momentum
Growth
EPS 1Y (TTM)2.27%
EPS 3Y2.4%
EPS 5Y6.13%
EPS Q2Q%-2.6%
EPS Next Y4.74%
EPS Next 2Y9.7%
EPS Next 3Y12.55%
EPS Next 5Y11.07%
Revenue 1Y (TTM)7.33%
Revenue growth 3Y5.33%
Revenue growth 5Y9.82%
Sales Q2Q%-0.83%
Revenue Next Year5.92%
Revenue Next 2Y7.87%
Revenue Next 3Y9.01%
Revenue Next 5Y7.82%
EBIT growth 1Y7.89%
EBIT growth 3Y0.33%
EBIT growth 5Y6.3%
EBIT Next Year28.4%
EBIT Next 3Y18.13%
EBIT Next 5Y13.13%
FCF growth 1Y34.67%
FCF growth 3Y12.39%
FCF growth 5Y7.29%
OCF growth 1Y31.03%
OCF growth 3Y10.95%
OCF growth 5Y7.7%