A month has gone by since the last earnings report for MarketAxess (MKTX). Shares have added about 14.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MarketAxess due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
MarketAxess Q2 Earnings Miss Estimates But Rise Y/Y
MarketAxess Holdings Inc.'s second-quarter 2019 earnings per share of $1.27 missed the Zacks Consensus Estimate by 2.3% but improved 15.9% year over year.
Revenues totaled $125 million, up 16.8% year over year. The top line, however, met the Zacks Consensus Estimate.
Commission revenues rose 18.7% year over year to $114.1 million. Information services revenues rose 3.3% year over year to $7.2 billion. Revenues from post-trade services were up 9.3% to $3.96 million.
Total trading volume expanded 25% year over year to $527 billion.
Total expenses at MarketAxess escalated 18% from the prior-year quarter to $64.6 million. This rise was primarily due to higher employee compensation and benefit, as the company continues to add personnel to support its growth initiatives.
Operating margin was 48.5%, down 10 basis points (bps) year over year.
Total assets were $812 million as of Jun 30, 2019, up 16.7% from year-end 2018 level.
Total cash, cash equivalents and investments were $286.2 million, up 16% from the year-ago figure.
As of Jun 30, 2019, total stockholders' equity was $661.9 million, up 8.9% from year-end 2018 levels.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
Currently, MarketAxess has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, MarketAxess has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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