The stock market has been ugly in 2020, and the financial sector has taken some of the hardest hits of any part of the market. Poor fundamentals have combined with the unique challenges that the coronavirus pandemic has brought to create especially difficult conditions for most financial companies.

Yet one standout in the industry has been MarketAxess Holdings (MKTX -2.19%). It hasn't just weathered the coronavirus storm well; it's gained over 20% so far this year, capping a decade that has seen the stock jump 2,700% since 2010. After such impressive gains, investors are intrigued, but they also want to know whether MarketAxess is still a buy even at these lofty levels.

MKTX Chart

MKTX data by YCharts.

Bringing the bond market into the 21st century

Stock investors might not understand just how backward the bond markets are. Nowadays, any stock investor can get access to online trading tools that they can use to conduct transactions electronically. There's rarely any reason to speak to a human being, and orders execute in a fraction of a second in what has largely become a purely automated chain of events.

Bond investing, on the other hand, still happens largely through personal contacts. But MarketAxess has set about to change that with its electronic trading platform for fixed-income securities. For years, MarketAxess has steadily made inroads with its platform's capabilities, wooing more market participants into the fold. That progress has happened not just in the U.S. but overseas as well, with access rising across key markets in Europe and the Asia-Pacific region as well as some emerging market economies. Even with the gains it's made so far, though, MarketAxess still has a long way to go before it can command the bond markets in terms of market share. That leaves plenty of room for additional growth.

Yellow paper highlighting the word bond.

Image source: Getty Images.

Showing its value in a pandemic

In 2019, MarketAxess stock soared 80% as customers kept adopting its platform. So, the fact that the stock has managed to keep rising in 2020 is even more remarkable in that context, especially with the coronavirus crisis front and center in people's minds.

In another way, however, it's not surprising to see MarketAxess thrive under current conditions. With so many disruptions to ordinary business caused by the pandemic, the value of MarketAxess' electronic trading platform has become even clearer. Moreover, bond markets have been extremely volatile lately as central banks seek to deal with the economic fallout from the pandemic, and that's made it even more important for bond market participants to have the latest tools to ensure they can capitalize on opportunities when they arise.

In the first quarter of 2020, MarketAxess kept growing, posting sales growth of 36% and earnings gains of 41%, both to new record highs. Credit trading volume was up almost 30% year over year, with record levels in bond markets ranging from Treasuries and U.S. corporate bonds to emerging market debt and Eurobonds. As CEO Rick McVey explained it, "MarketAxess played a valuable role keeping our clients connected to the market as traders moved from their centralized trading floors to home offices."

A hot stock priced for perfection

The biggest concern about MarketAxess is whether its stock has gotten ahead of its business prospects. The shares trade at about 65 times projected 2020 earnings, and analysts believe that some of the factors that have accelerated the company's growth lately could disappear and cause future earnings gains to slow. Yet the stock has routinely traded in a range of 45 to 60 times earnings, and bottom-line growth has support a rising share price even with multiples having stayed within that range until recently.

MarketAxess is having its moment in the spotlight, and a lot depends on what the company does with it. If it can keep the clients it's won during the pandemic, then it could give the company a huge boost to its growth. If not, though, the stock could reverse its recent gains. Only high-growth investors willing to take on that considerable risk should look at MarketAxess Holdings stock as a buy in the fintech sector right now.