* Note: Prices are in Million (M) USD.
Description:
MarketAxess Holdings Inc. (MarketAxess) is an international financial technology company that operates an electronic trading platform for the institutional credit markets, and also provides market data and post-trade services.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $544 M
Debt : $73 M
EBITDA : $422 M
Since Cash is greater than Total Debt, 5 points assigned.
This criteria used industry in which company operates:
Sector: Financial services
Industry: Capital markets
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 26.11
Since Forward PE Ratio is between 25 - 35, 1 point assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 20 overlapping fiscal years (max 20).Average Free Cash Flow: $133 M
Average Revenue: $359 M
Revenue Converted To Free Cash Flow (%): 36.9%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 25, 5 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $817 M
Revenue 4 Years Ago (2020-12-31): $689 M
Last 5 Years Average Revenue Growth: 4%
Since Revenue Growth is between 0 - 5, 1 point assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $38 M
Share Count 5 Years Ago (2020-12-31): $38 M
Company is buying back its own shares, 3 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $7.14
Trailing 12-Month Earnings Per Share (EPS): $6.94
Average Earnings Per Share (EPS): $7.04
Dividend Per Share (DPS): $3
Payout Ratio: 43%
Dividend Yield: 2%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is greater than 1, 1 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 20 valid ROE years (max 20).Average ROE: 19.0%
Since Average ROE is between 10 - 20, 3 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $184
52-Week Low: $183
Threshold Price (15% Above 52-Week Low): $210
Since Current price is within 15% threshold, 5 points assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $7,101 M
Since Market Cap is less than 10B, 1 point assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 2% exposure of Total Portfolio.
Value-Trade has assigned 30 points to above MarketAxess Holdings Inc (MKTX) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• Last 14 Years Avg PE
36.13 (>2× median)
• RCFC Based PE
41.53 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 14 Years Avg P/E (36.13)
× EPS ($7.04) = $254.36.
Last 14 Years Avg PE 36.13, Fair Value PE 15, Industry Based PE 15, Growth Based PE 3, RCFC Based PE 41.53, ROE Based PE 25.19, Risk-Free Anchored PE (25% MoS) 17.08. Based on these 7 values, average assigned is 21.85. Value-Trades has assined P/E value 21.85. Since an average (Current Year EPS + Next Year EPS) earning per share is $7.04.
The fair value of MarketAxess Holdings Inc (MKTX) stock should be (21.85 x $7.04) = $153.81.
