Value
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.3 |
| P/S | 7.2 |
| EV/EBITDA | 6.6 |
| Fwd P/E | 8.8 |
| PEG | 7.3 |
| Analyst target | 9.0 |
- ▸Forward P/E: 12.7x
- ▸PEG: 0.96
- ▸Attractively valued
MKTX · Why this verdict
Why MarketAxess Holdings (MKTX) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
MarketAxess is a wide-moat capital markets franchise trading roughly 29% below the analyst consensus price target with a favorable risk/reward ratio of approximately 5.5-to-1; the primary risks are a confirmed price downtrend and negative free cash flow that raises questions about the quality of reported earnings.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business carries a recognized wide economic moat supported by 36% net margins and a Piotroski F-Score of 8 out of 9, indicating broad-based financial health and a franchise with durable competitive advantages. Quality breakdown | Net margin sustains above 30% and Piotroski F-Score remains above 7 for at least 3 of the next 4 quarters. | →Stable |
| CounterFree cash flow is deeply negative relative to net income (-82%), meaning reported margins and earnings overstate actual cash generation; if this persists, the quality premium will be difficult to sustain. | ||
The stock trades roughly 29% below the analyst-derived price target with approximately 5.5-to-1 favorable risk/reward, while RSI at 27 reflects capitulation-level selling — a combination that has historically preceded mean-reversion recoveries in high-quality franchises. Price targets | Price closes above the 200-day moving average and sustains that level for at least 4 consecutive weeks within 12 months. | →Stable |
| CounterThe 200-day moving average slope is declining at 5.3% per month, indicating the downtrend is confirmed rather than merely technical noise; rising on-balance volume may reflect passive accumulation rather than a catalyst-driven reversal. | ||
Three of the last four quarters produced positive earnings surprises, with an average beat of approximately 14.8% — the most recent quarter delivered a beat even if narrow, suggesting underlying demand remains intact. Earnings | EPS surprise remains positive in the next two consecutive quarterly reports. | →Stable |
| CounterThe most recent beat was only 0.91%, essentially in-line, and a miss in August 2025 (-2.64%) shows the streak is not unbroken; if soft growth persists, beats may narrow further or reverse. | ||
Free cash flow is negative and runs at approximately -82% of net income, indicating the business is not converting reported earnings into cash — an earnings quality concern that tempers the otherwise strong margin picture. Components | FCF turns positive and sustains above 50% of net income for at least 2 consecutive quarters, signaling genuine cash generation. | →Stable |
| CounterThe wide economic moat and best-in-class margins suggest the FCF shortfall may be timing or working-capital related rather than structural; a recovering market environment could restore conversion rapidly. | ||
The business carries a recognized wide economic moat supported by 36% net margins and a Piotroski F-Score of 8 out of 9, indicating broad-based financial health and a franchise with durable competitive advantages.
→StableQuality breakdown
- Expectation
- Net margin sustains above 30% and Piotroski F-Score remains above 7 for at least 3 of the next 4 quarters.
CounterFree cash flow is deeply negative relative to net income (-82%), meaning reported margins and earnings overstate actual cash generation; if this persists, the quality premium will be difficult to sustain.
The stock trades roughly 29% below the analyst-derived price target with approximately 5.5-to-1 favorable risk/reward, while RSI at 27 reflects capitulation-level selling — a combination that has historically preceded mean-reversion recoveries in high-quality franchises.
→StablePrice targets
- Expectation
- Price closes above the 200-day moving average and sustains that level for at least 4 consecutive weeks within 12 months.
CounterThe 200-day moving average slope is declining at 5.3% per month, indicating the downtrend is confirmed rather than merely technical noise; rising on-balance volume may reflect passive accumulation rather than a catalyst-driven reversal.
Three of the last four quarters produced positive earnings surprises, with an average beat of approximately 14.8% — the most recent quarter delivered a beat even if narrow, suggesting underlying demand remains intact.
→StableEarnings
- Expectation
- EPS surprise remains positive in the next two consecutive quarterly reports.
CounterThe most recent beat was only 0.91%, essentially in-line, and a miss in August 2025 (-2.64%) shows the streak is not unbroken; if soft growth persists, beats may narrow further or reverse.
Free cash flow is negative and runs at approximately -82% of net income, indicating the business is not converting reported earnings into cash — an earnings quality concern that tempers the otherwise strong margin picture.
→StableComponents
- Expectation
- FCF turns positive and sustains above 50% of net income for at least 2 consecutive quarters, signaling genuine cash generation.
CounterThe wide economic moat and best-in-class margins suggest the FCF shortfall may be timing or working-capital related rather than structural; a recovering market environment could restore conversion rapidly.
Per-dimension breakdown
Quality
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 8.1 |
| ROA | 7.2 |
| Gross margin | 8.4 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 8.1 |
| FCF quality | 0.0 |
| Moat | 9.0 |
| Piotroski F | 8.9 |
- ▸Strong margins: 36%
- ▸Earnings quality RED FLAG: -82% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
5.5/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 5.5 |
Momentum
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 1.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -5.4%/30d — confirmed downtrend
Sentiment
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 9.8 |
| erm sentiment | 5.2 |
- ▸Analyst upside: 62%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $43,498 (0.001% of mkt cap)
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.9 |
| quality rank | 8.2 |
| growth rank | 2.4 |
- ▸Best-in-class margins
Technical
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.3 |
| support resistance | 10.0 |
| 52w position | 0.0 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.9 |
| days to cover | 7.2 |
| volatility | 2.8 |
| put call | 0.0 |
| implied vol | 5.7 |
| max pain risk | 3.0 |
| beta | 7.9 |
| debt equity | 9.0 |
- ▸Elevated put/call: 6.50
- ▸Above max pain $95
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.6 |
| dividend safety | 7.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 275.0%
How the verdict was assembled
Engine trigger
Wide-moat business. Accumulate on weakness.
Engine technical detail
verdict_path:
L4:PATH_E_WIDE_MOAT|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (6)
- ASYMMETRY:5.2>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.1<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
5.23
Upside
+40.7%
Downside
7.8%
Sizing output
STARTER
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeTEMP_HEADWIND — High quality (7.7) with weak momentum (3.1)
SuitabilityAGGRESSIVE — MCap $4.0B<$5B
Investment implication
The STRONG_BUY_WAIT verdict reflects the MOMENTUM gate's 3.1<4.5 outcome against Value at 8.0 and asymmetric R:R of 5.23.
The strongest dimensions are Value at 8.0, Quality at 7.7, and Sentiment at 7.4; the weakest are Momentum at 3.1, Peer rank at 4.1, and Insider at 5.0. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 5.23 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The business carries a recognized wide economic moat supported by 36% net margins and a Piotroski F-Score of 8 out of 9, indicating broad-based financial health and a franchise with durable competitive advantages.
Trip ifNet margin compresses below 25% for 2 consecutive quarters.
- P2The stock trades roughly 29% below the analyst-derived price target with approximately 5.5-to-1 favorable risk/reward, while RSI at 27 reflects capitulation-level selling — a combination that has historically preceded mean-reversion recoveries in high-quality franchises.
Trip ifAnalyst consensus price target falls below $135, reducing upside to less than 12% from current levels.
- P3Three of the last four quarters produced positive earnings surprises, with an average beat of approximately 14.8% — the most recent quarter delivered a beat even if narrow, suggesting underlying demand remains intact.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P4Free cash flow is negative and runs at approximately -82% of net income, indicating the business is not converting reported earnings into cash — an earnings quality concern that tempers the otherwise strong margin picture.
Trip ifFCF turns positive and exceeds 50% of net income for 2 consecutive quarters.