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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Marketaxess Holdings Inc. (XNAS:MKTX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MKTX
Name:
MARKETAXESS HOLDINGS INC. (XNAS:MKTX)
Sector:
- 34551.00K
Industry:
Capital Markets
CEO:
Mr. Richard McVey
Total Employees:
676
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -30.01% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MARKETAXESS HOLDINGS INC.(MKTX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND CAPITAL MARKETS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
249.91
One Month Price Target:
$250.76
Six Month Price Target :
$255.01
Likely Price in One Year's Time:
Ticker:
$260.1
Likely Trading Range Today Under (Normal Volatility)
$248.79
Price Upper limit ($) :
$250.88
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$237.22
This week:
$221.54
This month :
$193.17
Other Primary facts
Market Cap:
9.13B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
37.64M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
16.14%
-12.01%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$308.85
$282.23
$190.97
$217.59
Medium risk (<10%) entry points
Buy Call
Sell Call
$273.56
Buy Put:
Sell Put:
$267.88
$226.18
$231.94
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MKTX
Sharpe Ratio:
-1.57%
Comparison:
MKTX, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -144.81% lower than the industry
& is -168.71% lower than the market/S&P 500 average
Average Returns/Yield of
MKTX
Daily returns:
-0.03%
Weekly returns:
-0.15%
Monthly returns:
-0.59%
Yearly returns:
25.05%
Comparison of returns:
Average annual returns/yield (last 3 years) is -128.39% below industry average
Classification:
MKTX, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.47
Statistical test of Returns:
MKTX has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.46%
Weekly Volatility:
5.50%
Monthly Volatility:
10.99%
Yearly Volatility:
38.07%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.02%
Volatility in last five trading days has been -58.41% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.08%
Weekly VaR:
-11.35%
Monthly VaR:
-22.70%
How Much Can the price of
MKTX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-78.65%
This translates to price declining to:
$198.87
This translates to price declining to:
$53.36
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
MKTX is a 60.24% riskier investment compared to the market/S&P 500 & is 37.28% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -10.55% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MKTX
Beta in relation to market/S&P 500--0.61
Expected beta in 1 year's time:
0.548
Expected beta in 3 year's time:
0.775
Unlevered (debt free) Beta:
0.571
Beta in relation to Nasdaq (XNAS):
0.742
Beta in relation to all global stocks::
0.712
Beta Comparison & Analysis
Beta of competitors/peers::
1.117
Beta is -45.66% lower than peers
Average Industry Beta:
1.144
Beta is -46.96% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
15.32%
Sustainable growth rate is -33.24% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.144
Alpha is -202.54% below industry average alpha yield
Alpha is -918% below the market average
Analysis of Cost of Capital of
MKTX
Equity cost of capital:
0.073
Equity cost of capital is -33.50% below industry mean WACC
Unlevered (without debt) cost of capital:
6.87%
Before-tax cost of debt:
0.95%
After-tax cost of debt:
0.75%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.75%
WACC is -28.67% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$18.32
Revenue growth rate per share of (3Y):
9.19
Annual revenue growth rate is -20.34% below industry average
EPS:
$6.37
Expected Annual growth rate of EPS (3Y):
6.98%
Expected future EPS growth rate is -86.71% lower than the Capital Markets industry
Free cash flow (FCF) per share:
$6.17
Balance sheet equity growth per share: 58.13%
Equity growth rate per share is -41.90% lower than the industry
Debt per share
$2.30
EBITDA per share
$10.28
Valuation Analysis Today of
MKTX
P/E Ratio:
39.14
P/E Ratio of Competitors/Peers:
26.04
P/E ratio is 50.30% higher than main peers & is 95.75% higher than the industry
Stock price/value with industry average P/E ratio: $127.36
MKTX is 96.22% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $96.87
Present value of the expected future dividends only: $71.40
P/S (Price to Sales ratio):
13.64
Price to sales ratio is 218.35% above the industry mean
P/B (Price to book value ratio):
9.19
Price to free cash flow: 40.47
-
Net income growth rate (3Y):
47.59%
Net income growth rate is -139.38% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 11.32%
Dividend yeild: 1.09%
Previous Dividend: $0.70
Previous adjusted dividend: $0.70
Previous Dividend: $2.72
Expected next dividend best case: $0.75
Expected next dividend worst case: $0.65
Average dividend payment (long-term): $0.63
Average dividend increase/decrease (growth rate) % per period: 3.37%
Expected next dividend payment date: 16/08/2022
Expected next dividend record date: 08/02/2022
Expected next dividend declaration date: 07/12/2022
Previous dividend payment date: 18/05/2022
Previous dividend record date: 05/04/2022
Previous dividend declaration date: 13/04/2022
Dividend History:
2022-05-03--$0.70
2021-11-02--$0.66
2021-05-11--$0.66
2022-02-08--$0.70
2021-08-03--$0.66
2021-02-09--$0.66
Dividend growth rate is -88.65% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
8.44%
Net debt to equity ratio:
-27.18%
Debt to assets ratio:
5.06%
Net debt to assets ratio:
-16.29%
Debt-to-asset ratio is -93.18% below industry average
Ability to repay debt:
Interest coverage ratio:
469.58
Interest coverage ratio is 819.63% more than industry average
Looking forward:
Debt growth rate:
-5.54%
Annual debt growth is -125% lower than industry average debt growth rate
Debt repayment rate in last quarter: 53.65%
Analysis of Key Statistics
Correlation of price movement with the market:
0.518
Statistical significance of correlation:
MKTX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.637
Stock price is -18.63% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.637
Correlation of price movement with Nasdaq (^IXIC):
-0.073
Covariance of price movement with the market:
-0.105
Kurtosis
5.266
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.229
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MKTX
Gross Profit Margin Ratio:
301%
Operating Profit Margin Ratio:
46.68%
Operating profit margin is 140.98% higher than the industry
Net Profit Margin Ratio:
301%
Effective Tax Rate:
24.91%
Effective tax rate is 25.37% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
23.66%
Return on equity (ROE) is -2.89% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
14.18%
Return on assets (ROA) is 158.53% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
2.19
Current ratio is -47.91% below industry average
Cash Conversion Cycle (days):
33.4
Cash conversion cycle is 93.20% above industry average
The remaining useful life of property plant & equipment is: 1.4 years
Stock based compensation to net income ratio:
3.34%
In-depth Efficiency Analysis
Revenue generated per employee:
1.0M
Each employee generates -45% less revenue than industry average revenue per employee
EBITDA generated per employee:
572.4K
Each employee generates 103% more EBITDA than industry average revenue per employee
Profit generated per employee:
358.3K
Each employee generates 110% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 51.1K
Each employee generates 120% more free cash flow than industry average revenue per employee
Assets/Capital per employee
673.8K
Each employee generates 120% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MKTX
FIRST CITIZENS BANCSHARES, INC. (XNAS:FCNCA)
LPL FINANCIAL HOLDINGS INC. (XNAS:LPLA)
ARCH CAPITAL GROUP LTD. (XNAS:ACGLO)
MORNINGSTAR, INC. (XNAS:MORN)
XP Inc. (XNAS:XP)
HBANO
TMTSU
EAST WEST BANCORP, INC. (XNAS:EWBC)
NEWHOLD INVESTMENT II UNT (XNAS:NHICU)
Current Analyst Ratings
Strong buy�0%
Buy�13%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
689.54M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
170.58M
518.96M
-
114.65M
124.30M
9.64M
72.80M
197.10M
-
824.00K
63.57M
386.94M
321.87M
242.20M
322.54M
80.34M
242.20M
Statement of Cash Flow
Date:
Period:
16.77M
Differed Income Tax :
- 643.00K
Stock Based Compensation :
8.10M
Change in Working Capital :
- 111496.00K
Accounts Receivables:
- 307714.00K
Other Working Capital:
- 33670.00K
Other Non-Cash Items:
- 1229.00K
Net Cash Provided by Operating Activities:
- 23730.00K
Investments in PP&E:
- 1396.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
364.57M
11.31M
375.88M
711.32M
-
164.83M
1.25B
164.49M
154.79M
111.62M
24.56M
-
-
455.46M
-
1.71B
70.30M
-
42.61M
-
501.09M
571.39M
86.39M
26.17M
112.56M
-
683.94M
123.00K
995.19M
- 18381.0K
46.61M
March 31, 2022 at 6:00:00 AM
367.68M
1.02B
1.71B
35.88M
86.39M
- 278176.0K
-
- 9425.00K
- 10821.00K
- 100000.00K
-
- 38800.00K
- 27425.00K
79.76M
- 86467.00K
- 4356.00K
- 125374.00K
500.19M
625.57M
- 23730.00K
- 10821.00K
- 34551.00K
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
MKTX
2023
2024
2025
2026
2027
$273.60
$284.76
$296.38
$308.47
$321.05