What happened
Financial tech stock MarketAxess Holdings (MKTX 0.49%) rocketed 79.4% last year, according to data from S&P Global Market Intelligence. Including the stock's modest dividend, currently yielding 0.5%, it returned 80.7%.
The company operates a leading electronic platform for fixed-income securities (bonds) and provides market data and post-trade services for the global fixed-income markets.
For context, the S&P 500 index returned 31.5% in 2019.
Image source: Getty Images.
So what
We can attribute MarketAxess stock's strong 2019 performance to the shift in bond trading to online platforms, growth in participation in financial markets, and the company's solid financial performance.
In the third quarter, reported in October, total trading volume on the company's platform increased 37% year over year to $528.7 billion.
In the quarter, total revenue jumped 30% year over year to $131.6 million, slightly beating the Wall Street consensus estimate of $130 million. Commissions revenue rose 32.4% to $119.9 million, information services revenue increased 7.2% to $7.7 million, post-trade services revenue climbed 8.9% to $3.8 million, and other income fell 10.7% to $251,000. Earnings per share (EPS) grew 39% year over year to $1.42, surpassing the $1.38 analysts had been expecting.
MarketAxess CEO Rick McVey had this to say in the earnings release:
Broad-based growth in trading volumes across all major products and geographic regions drove record results in the third quarter as dealers and investors continue to embrace new solutions for credit trading automation. In addition to the acceleration of growth in current products, we are excited about new growth opportunities in U.S. Treasury trading, portfolio trading and Live Markets. Our investment in new technology solutions and products for our clients continues to grow while at the same time we produced operating margins in excess of 50% during the third quarter.
Now what
Investors don't have long to wait for material news. MarketAxess is scheduled to release its fourth-quarter and full-year 2019 results on Jan. 29. For the quarter, Wall Street is looking for EPS of $1.34 on revenue of $127.3 million, representing year-over-year growth of 10.7% and 4.3%, respectively.
In 2020, the Street is modeling for the company to grow earnings 13.7% year over year.
