Yahoo Finance Is a Beat in Store for MarketAxess (MKTX) in Q1 Earnings?
MarketAxess Holdings Inc. MKTX is slated to report first-quarter 2023 results on Apr 26, before the opening bell.
Q1 Estimates
The Zacks Consensus Estimate for MarketAxess’ first-quarter earnings per share (EPS) is pegged at $1.89, which indicates an improvement of 9.2% from the prior-year quarter’s reported figure. We estimate the metric to rise 8.7% year over year to $1.86.
The consensus mark for revenues stands at $200 million, which implies 7.5% growth from the year-ago quarter’s reported number and matches our estimate.
Earnings Surprise History
MarketAxess boasts an impressive earnings surprise history. Its bottom line beat estimates in each of the trailing four quarters, the average being 3.79%. This is depicted in the chart below:
MarketAxess Holdings Inc. Price and EPS Surprise
MarketAxess Holdings Inc. price-eps-surprise | MarketAxess Holdings Inc. Quote
What Our Quantitative Model Unveils
Our proven model predicts 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, which is the case here.
Earnings ESP: MarketAxess has an Earnings ESP of +0.33% because the Most Accurate Estimate of $1.90 is pegged higher than the Zacks Consensus Estimate of $1.89. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: MKTX carries a Zacks Rank of 3.
Factors to Note
Improved commissions resulting from higher variable transaction fees and fixed distribution fees are likely to have contributed to revenue growth in the first quarter. However, growing bond yields and marginally lower duration of U.S. high-grade bonds might have led to a reduced fee per capture, which in turn, is expected to have weighed on the top-line growth of MKTX in the to-be-reported quarter.
The Zacks Consensus Estimate for total commissions is pegged at $180 million, which implies 8.4% growth from the prior-year quarter’s reported number. Our estimate indicates commissions to improve 8.6% year over year to $180.5 million.
A rise in information services revenue is also likely to have provided an impetus to MarketAxess’ revenue growth. The consensus mark for information services revenue suggests 7.8% growth from the prior-year quarter’s reported number.
The trading volumes of MarketAxess are likely to have witnessed an uptick in the first quarter on the back of a diversified trading product portfolio and increased utilization of its Open Trading platform. Usage of the platform is expected to have led to growing market share gains within most of its product lines. Needless to say, higher trading volumes are likely to have boosted transaction fees for MKTX in the to-be-reported quarter.
The Zacks Consensus Estimate for total trading volume stands at 2,459 million, lower than our estimate of 2,477.8 million. The consensus mark for transaction fees is pegged at $148 million, which indicates a rise of 9.6% from the prior-year quarter’s figure.
However, the bottom line of MarketAxess is expected to have suffered a blow in the first quarter due to escalating expenses resulting from investments targeted to upgrade trading and data capabilities. A solid increase in credit open trading volume might have increased clearing costs. Our estimate indicates total expenses to rise 11% year over year.
Other Stocks to Consider
Here are some other companies from the Finance space, which according to our model, have the right combination of elements to beat on earnings this time around:
Cboe Global Markets, Inc. CBOE has an Earnings ESP of +2.07% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CBOE’s first-quarter 2023 earnings is pegged at $1.82 per share, suggesting 5.2% growth from the prior-year quarter’s reported number.
CBOE Global’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 2.57%.
AssetMark Financial Holdings, Inc. AMK has an Earnings ESP of +1.87% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for AMK’s first-quarter 2023 earnings stands at 54 cents per share, indicating a 38.5% rise from the prior-year quarter’s reported figure.
AssetMark Financial’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.95%.
Ares Management Corporation ARES has an Earnings ESP of +2.30% and a Zacks Rank of 3, currently. The Zacks Consensus Estimate for ARES’s first-quarter 2023 earnings is pegged at 83 cents per share, hinting toward a 27.7% improvement from the prior-year quarter’s reported figure.
Ares Management’s bottom line outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 5.00%.
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Cboe Global Markets, Inc. (CBOE) : Free Stock Analysis Report
MarketAxess Holdings Inc. (MKTX) : Free Stock Analysis Report
Ares Management Corporation (ARES) : Free Stock Analysis Report
AssetMark Financial Holdings, Inc. (AMK) : Free Stock Analysis Report
