The past year has been rough on shareholders of MarketAxess Holdings (NASDAQ:MKTX). The stock price is now down 26% since last November's peak, and remains within sight of the new 52-week lows reached just a few days ago. The bigger-picture downtrend is also still very much intact.

But the best time to step into solid companies is when their stocks have been unnecessarily upended. That's MarketAxess to be sure. While business has been relatively slow this year in the wake of the pandemic's impact, the company's long-standing pattern of growth is expected to be fully restored in 2022. This is a case where it's better to think pre-emptively than reactively.

Images of 100-dollar bills are superimposed over roman columns from a federal building

Image source: Getty Images.

Almost out of the turbulence

MarketAxess is not exactly a household name, though there's a good chance you or someone in your household has benefited from the company's services.

It manages an electronic bond-trading platform in addition to offering related post-trade services. Business was brisk through the middle of last year, but as CEO Richard McVey pointed out during October's third-quarter earnings call, credit-market trading currently faces headwinds "with the combination of historically low credit spreads and credit spread volatility," adding, "These conditions have persisted over the last three quarters."

To quantify that, through the first three quarters of the fiscal year, commission revenue is down about 1% versus levels at this point in 2020, with last quarter's commissions down about 5%.

But McVey also said during the third-quarter conference call that history suggests low credit spreads and credit spread volatility "will revert to the mean over time."

Translation: MarketAxess' biggest source of revenue is poised to recover.

Analysts certainly think this is the case anyway. While 2021 might not shape up as a banner year for the company, the analyst community foresees rebounding revenue and earnings growth in 2022, persisting at least through 2025.

MarketAxess is poised to restore its strong growth rate seen before the COVID-19 pandemic rattled the bond market.

Data source: Thomson Reuters. Chart by author.

And those outlooks are well-grounded.

The rise that interest rates saw over the course of 2020 -- following March 2020's huge plunge -- was shattered early this year when the world realized the pandemic would linger well into 2021. Treasury yields are back to being as low as they've ever been, with the exception of the record lows during the incredibly unusual circumstances linked to the pandemic's arrival early last year. These big swings in bond yields have been accompanied by equally unusual volatility, keeping some bond investors on the sidelines. Given this, it would have been surprising if MarketAxess' results hadn't slowed to a crawl.

Slowly but surely, though, the environment is returning to normal. The Federal Reserve's governors now collectively predict at least one hike in interest rates in 2022, and several more through the end of 2024. This should restore interest in the bond ownership MarketAxess facilitates. The return to normal in the bond trading environment should also curb the volatility that's turned off so many would-be investors.

Being picky can cost more than it's worth

While the 26% pullback suffered over the course of the past 12 months translates into a nice sale price for MarketAxess shares, long-standing market truths still apply. Namely, we don't know if we're at or near the bottom for this stock. While it's difficult to believe bonds as an investment category could become any less attractive than they were as of last month, the timing and pace of any turnaround is unpredictable, and it could take a few more quarters for MarketAxess' growth to regain its maximum potential.

But waiting for crystal-clear clarity that MarketAxess' business is on the mend could easily mean you'll miss out on the best part of any rebound in the stock. Bigger-picture investors understand that the sizable sell-off since last November makes this name too good to pass up right now, whether we're at the exact low or not.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.