MarketAxess (MKTX): Reassessing Valuation After a Year of Share Price Weakness and Slower Momentum

MarketAxess Holdings (MKTX) has been grinding lower this year, with the stock down about 29% year to date and roughly 33% over the past year, even as earnings and revenue continue to grow.

See our latest analysis for MarketAxess Holdings.

The latest leg down, including a 14.8% 90 day share price return and a 33.5% 1 year total shareholder return, signals fading momentum as investors reassess what they are willing to pay for the company’s consistent but steady growth.

If this kind of re rating has you rethinking your exposure to financial infrastructure names, it is a good moment to broaden your search and explore fast growing stocks with high insider ownership

With shares sliding despite solid double digit profit growth and a sizable gap to analyst targets, the key question now is whether MarketAxess is quietly drifting into undervalued territory or if the market already sees growth stalling from here.

Most Popular Narrative Narrative: 20.5% Undervalued

With MarketAxess closing at $159.71 against a narrative fair value near $201, the current gap frames an intriguing long term valuation story.

The analysts have a consensus price target of $218.833 for MarketAxess Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $274.0, and the most bearish reporting a price target of just $168.0.

Read the complete narrative.

Curious how a maturing, slower growing platform still earns a premium style earnings multiple and higher margins in this narrative? The long range revenue, profit and discount rate assumptions quietly reshape what fair value could mean here.

Result: Fair Value of $200.90 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sustained market share losses to rivals and slower adoption of new protocols could cap volumes, compress fees, and challenge the undervaluation thesis.

Find out about the key risks to this MarketAxess Holdings narrative.

Another Angle on Valuation

On traditional earnings metrics, MarketAxess looks far less forgiving. Its P/E ratio of 27 times earnings sits above the US Capital Markets industry at 23.8 times, peers at 26.3 times, and well ahead of a fair ratio of 14.8 times. This suggests meaningful derating risk if sentiment sours further.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own MarketAxess Holdings Narrative

If you see things differently or want to dig into the numbers yourself, you can build a custom view in just a few minutes. Do it your way

A great starting point for your MarketAxess Holdings research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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