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MarketAxess Holdings Inc. (NASDAQ:MKTX) Just Reported And Analysts Have Been Lifting Their Price Targets

Simply Wall St
·4 min read

MarketAxess Holdings Inc. (NASDAQ:MKTX) last week reported its latest third-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. MarketAxess Holdings reported in line with analyst predictions, delivering revenues of US$164m and statutory earnings per share of US$1.78, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for MarketAxess Holdings

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Taking into account the latest results, the most recent consensus for MarketAxess Holdings from 13 analysts is for revenues of US$743.7m in 2021 which, if met, would be a solid 15% increase on its sales over the past 12 months. Per-share earnings are expected to ascend 10% to US$8.18. In the lead-up to this report, the analysts had been modelling revenues of US$731.2m and earnings per share (EPS) of US$8.01 in 2021. So the consensus seems to have become somewhat more optimistic on MarketAxess Holdings' earnings potential following these results.

The consensus price target rose 6.0% to US$558, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on MarketAxess Holdings, with the most bullish analyst valuing it at US$621 and the most bearish at US$500 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting MarketAxess Holdings is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 15%, in line with its 14% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.0% per year. So although MarketAxess Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards MarketAxess Holdings following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on MarketAxess Holdings. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for MarketAxess Holdings going out to 2024, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for MarketAxess Holdings that you need to take into consideration.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.