Value
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.7 |
| P/S | 5.8 |
| EV/EBITDA | 4.2 |
| Fwd P/E | 6.9 |
| PEG | 5.5 |
| Analyst target | 3.0 |
- ▸Forward P/E: 18.4x
- ▸PEG: 1.37
MKTX · Why this verdict
Why MarketAxess Holdings (MKTX) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.3/10
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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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. | ↓Deteriorating |
| 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.
↓DeterioratingQuality 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.
↓DeterioratingEarnings
- 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.
↓DeterioratingComponents
- 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
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.7 |
| ROA | 6.8 |
| Gross margin | 8.3 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.5 |
| FCF quality | 0.0 |
| Moat | 7.2 |
| Piotroski F | 7.8 |
- ▸Strong margins: 35%
- ▸Earnings quality RED FLAG: -149% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
2.3/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.4 |
| EPS growth | 2.2 |
- ▸Declining revenue: -0%
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 2.4 |
- ▸Overbought (RSI 99)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 99 (late-cycle distribution risk)
Sentiment
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.7 |
| Analyst rating | 5.0 |
| Price target | 4.6 |
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $23,115 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.4 |
| quality rank | 7.8 |
| growth rank | 1.4 |
- ▸Best-in-class margins
Technical
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.6 |
| support resistance | 0.3 |
| 52w position | 5.0 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 9.6 |
| volatility | 6.4 |
| put call | 0.0 |
| implied vol | 4.5 |
| beta | 8.1 |
| debt equity | 9.4 |
| news risk | 5.0 |
- ▸Elevated put/call: 2.94
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 5.0 |
| dividend safety | 6.7 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:84d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.0=NEGATIVE
Warning (2)
- DEATH_CROSS:momentum=6.6>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.03
Upside
-15.5%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 99
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Insider at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.0=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.03 — supplementary context, not the trigger for this path.
The strongest dimensions are Insider at 7.3, Quality at 7.0, and Momentum at 6.6; the weakest are Growth at 2.3, Technical at 2.6, and Sentiment at 4.5. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -1.03 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Wide Moat Margins Durability
Trip ifNet margin compresses below 25% for 2 consecutive quarters.
- P2Discount To Analyst Consensus
Trip ifAnalyst consensus price target falls below $135, reducing upside to less than 12% from current levels.
- P3Earnings Beat Discipline
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P4Negative Free Cash Flow Risk
Trip ifFCF turns positive and exceeds 50% of net income for 2 consecutive quarters.