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Higher Trading Volumes to Aid MarketAxess (MKTX) Q4 Earnings

Zacks Equity Research
·3-min read

MarketAxess Holdings, Inc. MKTX is set to report fourth-quarter and full-year 2019 results on Jan 29, 2020.

The company's performance in the to-be reported quarter is likely to have benefited from a rise in revenues, partly offset by higher operating expenses.

Factors at Play

The company is likely to report a broad-based volume and market share gains across products and regions.

Overall trading volume is expected to have gone up due to increase in active clients, market share and market volumes across its four trading products. An increase in trading volumes will drive revenues from commission.

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Revenues from Information Services are likely to have increased due to new data contracts.

Post-trade services revenues are expected to have gained from increase in regulatory transaction reporting services.

Expenses are likely to have risen due to higher employee compensation and benefit costs, technology and communication expenses, professional and consulting fees, and general and administrative costs.

For the to-be-reported quarter, the Zacks Consensus Estimate for total revenues is pegged at $126.93 million, indicating a 12.9% increase from the year-ago quarter’s reported figure. The consensus mark for earnings per share stands at $1.30, indicating a rise of 7.4% from the prior-year reported number.

Acquisition of LiquidityEgde

During the quarter under review, MarketAxess completed the acquisition of LiquidityEdge, which provides a venue for trading of U.S. Treasury. The deal will launch MarketAxess into U.S. Treasury trading with meaningful initial market share and broad connectivity. However, the deal is not expected to have a material impact on the company’s earnings, before deal costs and amortization of intangibles.

Company’s Guidance

For 2019, the company expects expenses to be near the high end of the guided range of $256 million.

Earnings Surprise History

The company boasts an attractive positive earnings surprise history, having surpassed estimates in three of the trailing four quarters, the beat being 1.45%, on average. This is depicted in the chart below:

MarketAxess Holdings Inc. Price and EPS Surprise

MarketAxess Holdings Inc. Price and EPS Surprise
MarketAxess Holdings Inc. Price and EPS Surprise

MarketAxess Holdings Inc. price-eps-surprise | MarketAxess Holdings Inc. Quote

Here is what our quantitative model predicts:

Our proven model does not conclusively predict an earnings beat for MarketAxess this time around. The combination of a positive  Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

MarketAxess has an Earnings ESP of 0.00% and a Zacks Rank #3.

Stocks That Warrant a Look

Here are a few finance stocks that you may want to consider as our model shows that these have the right combination of elements to beat on earnings in the upcoming releases.

Global Payments Inc. GPN has an Earnings ESP of +3.15% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fidelity Information Services, Inc. FIS has an Earnings ESP of +0.45% and a Zacks Rank #2.

Square, Inc. SQ has an Earnings ESP of +6.14% and a Zacks Rank #3.


5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Square, Inc. (SQ) : Free Stock Analysis Report
 
MarketAxess Holdings Inc. (MKTX) : Free Stock Analysis Report
 
Fidelity National Information Services, Inc. (FIS) : Free Stock Analysis Report
 
Global Payments Inc. (GPN) : Free Stock Analysis Report
 
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