Higher Trading Volumes To Aid MarketAxess (MKTX) Q4 Earnings
Zacks Investment Research | Jan 27, 2020 10:03PM ET
MarketAxess Holdings, Inc. (NASDAQ:MKTX) is set to report fourth-quarter and full-year 2019 results on Jan 29, 2020.
The company's performance in the to-be reported quarter is likely to have benefited from a rise in revenues, partly offset by higher operating expenses.
Factors at Play
The company is likely to report a broad-based volume and market share gains across products and regions.
Overall trading volume is expected to have gone up due to increase in active clients, market share and market volumes across its four trading products. An increase in trading volumes will drive revenues from commission.
Revenues from Information Services are likely to have increased due to new data contracts.
Post-trade services revenues are expected to have gained from increase in regulatory transaction reporting services.
Expenses are likely to have risen due to higher employee compensation and benefit costs, technology and communication expenses, professional and consulting fees, and general and administrative costs.
For the to-be-reported quarter, the Zacks Consensus Estimate for total revenues is pegged at $126.93 million, indicating a 12.9% increase from the year-ago quarter’s reported figure. The consensus mark for earnings per share stands at $1.30, indicating a rise of 7.4% from the prior-year reported number.
Acquisition of LiquidityEgde
During the quarter under review, MarketAxess completed the acquisition of LiquidityEdge, which provides a venue for trading of U.S. Treasury. The deal will launch MarketAxess into U.S. Treasury trading with meaningful initial market share and broad connectivity. However, the deal is not expected to have a material impact on the company’s earnings, before deal costs and amortization of intangibles.
Company’s Guidance
For 2019, the company expects expenses to be near the high end of the guided range of $256 million.
Earnings Surprise History
The company boasts an attractive positive earnings surprise history, having surpassed estimates in three of the trailing four quarters, the beat being 1.45%, on average. This is depicted in the chart below:
MarketAxess Holdings Inc. Price and EPS Surprise
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