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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Tradeweb Markets Inc. (XNAS:TW) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TW
Name:
TRADEWEB MARKETS INC. (XNAS:TW)
Sector:
45.24M
Industry:
Capital Markets
CEO:
Mr. Lee Olesky
Total Employees:
1,046
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -109.69% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF TRADEWEB MARKETS INC.(TW) 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 ($) :
66.78
One Month Price Target:
$67.12
Six Month Price Target :
$68.84
Likely Price in One Year's Time:
Ticker:
$70.9
Likely Trading Range Today Under (Normal Volatility)
$66.59
Price Upper limit ($) :
$67.07
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$63.93
This week:
$60.42
This month :
$54.05
Other Primary facts
Market Cap:
15.70B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
234.39M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
10.44%
-11.1%
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:
$79.98
$73.86
$53.58
$59.70
Medium risk (<10%) entry points
Buy Call
Sell Call
$71.87
Buy Put:
Sell Put:
$70.56
$61.68
$63.00
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TW
Sharpe Ratio:
3.33%
Comparison:
TW, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is -4.63% lower than the industry
& ratio is 46.22% higher than the market/S&P 500 average
Average Returns/Yield of
TW
Daily returns:
0.08%
Weekly returns:
0.40%
Monthly returns:
1.59%
Yearly returns:
25.05%
Comparison of returns:
Average annual returns/yield (last 3 years) is -24.03% below industry average
Classification:
TW, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.41
Statistical test of Returns:
TW has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.11%
Weekly Volatility:
4.73%
Monthly Volatility:
9.45%
Yearly Volatility:
32.75%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.74%
Volatility in last five trading days has been -17.67% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.26%
Weekly VaR:
-9.53%
Monthly VaR:
-19.06%
How Much Can the price of
TW
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-66.03%
This translates to price declining to:
$56.13
This translates to price declining to:
$22.69
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
TW is a 34.53% riskier investment compared to the market/S&P 500 & is 15.25% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -23.06% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TW
Beta in relation to market/S&P 500--0.92
Expected beta in 1 year's time:
0.635
Expected beta in 3 year's time:
0.898
Unlevered (debt free) Beta:
0.825
Beta in relation to Nasdaq (XNAS):
0.661
Beta in relation to all global stocks::
0.524
Beta Comparison & Analysis
Beta of competitors/peers::
0.864
Beta is 6.32% higher than peers
Average Industry Beta:
1.144
Beta is -19.72% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
5.05%
Sustainable growth rate is -77.99% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.096
Alpha is -31.82% below industry average alpha yield
Alpha is 610% higher than market/& is unsustainably high
Analysis of Cost of Capital of
TW
Equity cost of capital:
0.094
Equity cost of capital is -14.07% below industry mean WACC
Unlevered (without debt) cost of capital:
8.48%
Before-tax cost of debt:
-1.40%
After-tax cost of debt:
-1.11%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
-1.11%
WACC is -4.02% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$4.76
Revenue growth rate per share of (3Y):
2.96
Annual revenue growth rate is -83.79% below industry average
EPS:
$1.16
Expected Annual growth rate of EPS (3Y):
24.12%
Expected future EPS growth rate is -54.04% lower than the Capital Markets industry
Free cash flow (FCF) per share:
$2.85
Balance sheet equity growth per share: -74.82%
Equity growth rate per share is -174.78% lower than the industry
Debt per share
$0.00
EBITDA per share
$2.18
Valuation Analysis Today of
TW
P/E Ratio:
54.4
P/E Ratio of Competitors/Peers:
20.48
P/E ratio is 165.64% higher than main peers & is 172.10% higher than the industry
Stock price/value with industry average P/E ratio: $23.19
TW is 187.93% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $14.69
Present value of the expected future dividends only: $3.39
P/S (Price to Sales ratio):
14.04
Price to sales ratio is 227.74% above the industry mean
P/B (Price to book value ratio):
2.96
Price to free cash flow: 23.45
-
Net income growth rate (3Y):
-2.72%
Net income growth rate is -97.75% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 6.76%
Dividend yeild: 0.48%
Previous Dividend: $0.08
Previous adjusted dividend: $0.08
Previous Dividend: $0.32
-
-
Average dividend payment (long-term): $0.08
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 30/08/2022
-
Previous dividend payment date: 15/06/2022
Previous dividend record date: 06/01/2022
-
Dividend History:
2022-05-31--$0.08
2021-11-30--$0.08
2021-05-28--$0.08
2022-02-28--$0.08
2021-08-31--$0.08
2021-02-26--$0.08
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
14.99%
Net debt to equity ratio:
-17.13%
Debt to assets ratio:
11.59%
Net debt to assets ratio:
-13.27%
Debt-to-asset ratio is -84.37% below industry average
Ability to repay debt:
Interest coverage ratio:
-1142.27
Interest coverage ratio is -2337.02% less than industry average
Looking forward:
Debt growth rate:
-100.00%
Annual debt growth is -554% lower than industry average debt growth rate
-
Analysis of Key Statistics
Correlation of price movement with the market:
0.557
Statistical significance of correlation:
TW has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.637
Stock price is -12.59% 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):
-0.021
Covariance of price movement with the market:
-0.026
Kurtosis
4.173
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:
-0.256
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
TW
Gross Profit Margin Ratio:
249%
Operating Profit Margin Ratio:
33.39%
Operating profit margin is 72.36% higher than the industry
Net Profit Margin Ratio:
249%
Effective Tax Rate:
24.61%
Effective tax rate is 23.84% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
5.20%
Return on equity (ROE) is -78.64% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.03%
Return on assets (ROA) is -26.52% lower than the industry
Financial Leverage:
1.1x
Current Ratio:
9.27
Current ratio is 120.44% above industry average
Cash Conversion Cycle (days):
44.1
Cash conversion cycle is 155.17% above industry average
The remaining useful life of property plant & equipment is: 2.8 years
Stock based compensation to net income ratio:
5.67%
In-depth Efficiency Analysis
Revenue generated per employee:
1.1M
Each employee generates -42% less revenue than industry average revenue per employee
EBITDA generated per employee:
488.1K
Each employee generates 73% more EBITDA than industry average revenue per employee
Profit generated per employee:
231.3K
Each employee generates 35% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
43.3K
Each employee generates -286% less free cash flow than industry average revenue per employee
Assets/Capital per employee
4.4M
Each employee generates -286% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
TW
Futu Holdings Ltd (XNAS:FUTU)
CINCINNATI FINANCIAL CORPORATION (XNAS:CINF)
FIFTH THIRD BANCORP (XNAS:FITBI)
MARKETAXESS HOLDINGS INC. (XNAS:MKTX)
ARCH CAPITAL GROUP LTD. (XNAS:ACGL)
HUNTINGTON BANCSHARES INCORPORATED (XNAS:HBAN)
THE CARLYLE GROUP INC. (XNAS:CG)
ACGLP
ARCH CAPITAL GROUP LTD. (XNAS:ACGLO)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: -
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.11B
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:
421.63M
692.91M
-
146.01M
146.01M
-
162.05M
308.06M
-
- 447.00K
174.79M
510.60M
372.10M
241.93M
383.30M
94.32M
241.93M
Statement of Cash Flow
Date:
Period:
44.45M
Differed Income Tax :
11.64M
Stock Based Compensation :
13.71M
Change in Working Capital :
- 1434.00K
Accounts Receivables:
- 36437.00K
Other Working Capital:
885.95M
Other Non-Cash Items:
- 106090.00K
Net Cash Provided by Operating Activities:
45.24M
Investments in PP&E:
-
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
828.06M
-
828.06M
164.97M
-
-
993.03M
-
2.78B
1.15B
-
651.09M
-
4.58B
9.59B
6.00B
47.49M
31.93M
-
27.67M
-
107.08M
-
579.65M
600.31M
-
707.39M
1.00K
261.92M
- 1964.0K
4.39B
March 31, 2022 at 6:00:00 AM
729.69M
4.65B
5.36B
-
31.93M
- 796135.0K
-
- 18040.00K
- 18040.00K
-
-
-
- 16350.00K
- 151731.00K
- 168081.00K
- 3109.00K
- 143987.00K
829.06M
973.05M
45.24M
-
45.24M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
TW
2023
2024
2025
2026
2027
$71.27
$75.67
$80.34
$85.30
$90.57