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Valued at a market cap of $9.7 billion, MarketAxess Holdings Inc. (MKTX) operates an electronic trading platform for institutional investors and broker-dealer companies. The New York-based company offers trading technology that provides liquidity access in U.S. high-grade bonds, U.S. high-yield bonds, emerging market debt, euro bonds, municipal bonds, U.S. government bonds, and other fixed-income securities.
Companies valued at less than $10 billion are generally described as “mid-cap” stocks, and MarketAxess Holdings fits right into that category. The company derives its operating revenues from commissions, information services, and post-trade services and has a growing global network of investors, dealers, and alternative market makers.
Despite a 14.3% decline from its 52-week high of $297.97 recorded in December last year, shares of this bond trading platforms operator have gained 27.3% over the past three months, surpassing the broader Financial Select Sector SPDR Fund’s (XLF) 9.3% return over the same time frame.
However, in the longer term, MKTX stock is down 12.8% on a YTD basis, lagging behind XLF’s 19.5% gains. Moreover, shares of MKTX have gained 19.5% over the past 52 weeks, underperforming XLF’s 35.5% returns over the same time frame.
Yet, MKTX has been trading above its 200-day moving average since August and has remained above its 50-day moving average since July, indicating a bullish trend.
Despite missing Wall Street’s revenue estimates, shares of MKTX jumped 5.2% following its Q2 earnings release on Aug. 6 as its earnings of $1.72 per share surpassed the consensus estimates while increasing 5.5% year over year. The outperformance was primarily driven by significant improvement in U.S. high-grade commission revenues, partially offset by the lesser trading activity of U.S. high-yield bonds. The company’s geographic expansion and product diversification increased the average daily volume (ADV) of emerging markets and Eurobonds, which further bolstered investor confidence.
MKTX has lagged behind its rival, Intercontinental Exchange, Inc. (ICE), which gained 44.3% over the past 52 weeks and 23.6% on a YTD basis.
Despite MKTX’s underperformance over the past year, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 14 analysts covering the stock, and as of writing, the stock is trading above its mean price target of $238.08.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
