Here's Why Investors Should Retain MarketAxess Stock for Now

MarketAxess Holdings Inc. MKTX is well-poised for growth, driven by improving trading volumes, acquisitions and partnerships and a robust financial position supporting expansion and shareholder returns. In the past three months, shares of MKTX have grown 5%, underperforming the industry’s 7.2% rise.

MarketAxess — with a market capitalization of $6.8 billion — is a multi-dealer trading platform that offers institutional investors access to global liquidity in products like U.S. high-grade corporate bonds, emerging markets and high-yield bonds, European bonds, U.S. agency bonds, credit derivatives and other fixed-income securities.

Courtesy of solid prospects, MKTX currently carries a Zacks Rank #3 (Hold).

Where Do Estimates for MKTX Stand?

The Zacks Consensus Estimate for MKTX’s 2025 earnings is pegged at $7.42 per share, indicating a 1.9% year-over-year rise. In the past 30 days, it has witnessed two upward estimate revisions against none in the opposite direction. Furthermore, the consensus mark for revenues is pegged at $852.4 million for 2025, implying a 4.3% year-over-year rise. MKTX beat earnings estimates in each of the past four quarters, with an average surprise of 4.1%.

MarketAxess Holdings Inc. Price, Consensus and EPS Surprise

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

MKTX’s Growth Drivers

MarketAxess continues to benefit from rising commission revenues driven by rising trading volumes. In the first nine months of 2025, credit trading volume rose 10% year over year, along with 3% growth in commission-based revenues. Revenues from information services, post-trade services and technology services also contribute to the upside.

MKTX is strategically expanding its reach through targeted acquisitions and partnerships to enhance its offerings, tap into new markets and launch innovative products and services. MarketAxess is investing heavily in technology modernization and product innovation to strengthen its competitive positioning across market cycles.

The company also focuses on upgrading its core infrastructure by integrating cutting-edge automation and algorithmic execution tools. A key highlight of its strategy is the rollout of new protocols like Mid-X for dealer-to-dealer trading, along with a fixed-income closing auction designed to capture end-of-day liquidity and bolster trading activities for index-linked products and ETFs.

MarketAxess maintains a strong financial position and concluded third-quarter 2025 with $473.3 million in cash and cash equivalents, coupled with minimal operating lease liabilities of $66.9 million. Net cash generated from operations totaled $223.5 million in the first nine months, which rose 6.9% year over year. This financial strength enables the company to reinvest in its business while continuing share repurchases and dividend payments. From the start of 2025 through October, MarketAxess repurchased shares worth $120 million.

MKTX’s Key Risks

There are some factors, however, that investors should keep a careful eye on.

MarketAxess is grappling with increasing expenses, which are putting pressure on its profit margins. Total expenses rose 5% year over year in the first nine months of 2025. Ongoing investments in various areas, including the trading platform, new protocols, infrastructure and additional headcount, are expected to contribute to rising expenses in the days ahead. MKTX estimated total expenses to be between $505 million and $525 million for 2025.

The company’s valuation remains stretched at the current level. MarketAxess currently has a forward 12-month P/E of 22.77X, higher than the industry’s average of 15.34X. Also, its dividend yield of 1.7% remains below the industry average of 1.8%.

Key Picks

Some better-ranked stocks in the broader finance space are Piper Sandler Companies PIPR, Heritage Insurance Holdings Inc. HRTG and Robinhood Markets, Inc. HOOD, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Piper Sandler Companies’ current-year earnings of $15.54 per share has witnessed one upward revision in the past 60 days against none in the opposite direction. Piper Sandler Companies beat earnings estimates in each of the trailing four quarters, with the average surprise being 44.7%. The consensus estimate for current-year revenues is pegged at $1.8 billion, implying 14.2% year-over-year growth.

The Zacks Consensus Estimate for Heritage Insurance’s current-year earnings of $5.14 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. Heritage Insurance beat earnings estimates in each of the trailing four quarters, with the average surprise being 100.1%. The consensus estimate for current-year revenues is pegged at $844.6 million, calling for 3.4% year-over-year growth.

The Zacks Consensus Estimate for Robinhood Markets’ current-year earnings is pegged at $1.99 per share and has witnessed one upward revision in the past seven days against no movement in the opposite direction. Robinhood Markets beat earnings estimates in each of the trailing four quarters, with the average surprise being 25.8%. The consensus estimate for current-year revenues is pegged at $4.5 billion, calling for 51.9% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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