MarketAxess Holdings Inc (MKTX, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $227.88, MarketAxess Holdings Inc has witnessed a daily gain of 1.1%, marked against a three-month change of -17.31%. A thorough analysis, underlined by the GF Score, suggests that MarketAxess Holdings Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 9/10
- Profitability rank: 10/10
- Growth rank: 10/10
- GF Value rank: 10/10
- Momentum rank: 4/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, and growth, and a slightly lower momentum rank, GuruFocus assigned MarketAxess Holdings Inc the GF Score of 96 out of 100, which signals the highest outperformance potential.
Understanding MarketAxess Holdings Inc Business
MarketAxess Holdings Inc, with a market cap of $8.63 billion and sales of $752.55 million, operates a leading electronic fixed-income trading platform. Founded in 2000, the company connects broker/dealers and institutional investors, focusing on credit-based fixed income securities. Its main trading products include U.S. investment-grade and high-yield bonds, Eurobonds, and Emerging Market corporate debt. MarketAxess Holdings Inc has expanded into Treasuries and municipal bonds with the acquisitions of LiquidityEdge and MuniBrokers in 2019 and 2021, respectively. Additionally, the company has bolstered its pre- and post-trade services with the acquisition of Regulatory Reporting Hub from Deutsche Börse Group in 2020, enhancing its product offerings.
Financial Strength Breakdown
MarketAxess Holdings Inc's Financial Strength rating is a testament to its resilient balance sheet and prudent capital management. An Interest Coverage ratio of 158.86 indicates a strong ability to cover interest obligations, far exceeding the benchmark set by Benjamin Graham. The Altman Z-Score of 9.33 further emphasizes MarketAxess Holdings Inc's defense against financial distress. A Debt-to-Revenue ratio of 0.11 showcases the company's strategic debt management, solidifying its financial health.
Profitability Rank Breakdown
The Profitability Rank of MarketAxess Holdings Inc reflects its superior ability to generate profits compared to its peers. This is further reinforced by its Predictability Rank of 5.0 stars out of five, indicating a consistent operational performance that instills confidence in investors.
Growth Rank Breakdown
MarketAxess Holdings Inc's high Growth Rank demonstrates its commitment to business expansion. However, its 3-Year Revenue Growth Rate of 3.4% is worse than 53.35% of companies in the Capital Markets industry. This indicates that while MarketAxess Holdings Inc is growing, there is room for improvement in its growth rate relative to its industry peers.
Next Steps
Considering MarketAxess Holdings Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. Investors seeking companies with similar robust financial health and growth prospects can explore more options using the GF Score Screen available to GuruFocus Premium members. As MarketAxess Holdings Inc continues to navigate the dynamic financial markets, its strong GF Score serves as a beacon for value investors looking for a solid investment opportunity.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
