MarketAxess' Fourth-Quarter Results Pressured by Lower Trading Volume and Rising Costs

Wide-moat MarketAxess reported fourth-quarter results that were in line with our expectations heading into the release. Earnings per share fell 28% to $1.37 while revenue fell 4% to $165 million. While the drop in earnings was significant, 2020 is a difficult comparison as volatile fixed income markets drove higher trading volume industrywide and incentivized the use of electronic trading networks, like MarketAxess, over voice-based trading. Operating expenses also rose 16%, compressing margins. As we incorporate these results, we do not expect to make a material change to our $355 fair value estimate.