Value
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.4 |
| P/S | 5.8 |
| EV/EBITDA | 4.2 |
| Fwd P/E | 6.7 |
| PEG | 4.8 |
| Analyst target | 3.0 |
- ▸Forward P/E: 19.0x
- ▸PEG: 1.68
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. How we score · Editorial policy
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VerdictBUY WAIT
Overall score5.2/10
ConfidenceMEDIUM
MacroRISK_OFF
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. | ↑Improving |
| 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. | ↓Deteriorating |
| 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. | ↑Improving |
| 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.
↑ImprovingQuality 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.
↓DeterioratingPrice 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.
↑ImprovingComponents
- 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
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 7.3 |
| ROA | 7.0 |
| Gross margin | 8.2 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 6.3 |
| Moat | 7.9 |
| Piotroski F | 8.9 |
- ▸Strong margins: 34%
- ▸Wide economic moat
- ▸Strong Piotroski F-Score: 8/9
- ▸High-quality business
Growth
1.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.7 |
| EPS growth | 0.0 |
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 1.1 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 5.0 |
| Price target | 4.8 |
Insider
5.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 7.8 |
| notable moves | 5.0 |
- ▸Insider selling (low materiality) — $1,055,022 (0.018% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.1 |
| quality rank | 7.8 |
| growth rank | 2.0 |
- ▸Best-in-class margins
- ▸Conservative debt levels
Technical
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.8 |
| support resistance | 2.1 |
| 52w position | 7.0 |
Risk (lower is worse)
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.8 |
| days to cover | 6.3 |
| volatility | 10.0 |
| put call | 10.0 |
| implied vol | 6.3 |
| beta | 8.2 |
| debt equity | 9.5 |
| news risk | 6.0 |
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.4 |
| dividend safety | 9.0 |
| news activity | 8.0 |
- ▸Strong earnings: 3B/1M
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:WITHIN_BANDPassed (5)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- EARNINGS_PROXIMITY:90d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.0=NEGATIVE
Warning (2)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.96
Upside
-14.4%
Downside
15.0%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The STRONG_BUY_WAIT verdict reflects the ASYMMETRY gate's -1.0=NEGATIVE outcome against Quality at 8.2 and asymmetric R:R of -0.96.
The strongest dimensions are Quality at 8.2, Risk (lower is worse) at 7.5, and Catalyst at 6.2; the weakest are Growth at 1.4, Technical at 3.6, and Momentum at 4.9. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.96 and an engine sizing output of STARTER.
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.