MarketAxess: A High-ROIC Company Trading At An Attractive Valuation

MarketAxess is a high-quality, capital-light company with strong returns, now trading at a compelling valuation after significant multiple compression. Despite competitive pressures from Tradeweb and Trumid, MKTX is growing volumes in emerging markets and Eurobonds, supported by innovative electronic trading tools. Volume growth is outpacing fee-per-million (FPM) compression, with Q1 2026 showing 17% volume growth and steady operating margins despite FPM declines. I expect MKTX to deliver a conservative 5-year annual return in the mid-teens, driven by expanding electronic trading penetration and ongoing share repurchases.

MarketAxess ( MKTX ) is a quality compounder that produces high returns on invested capital. It has been the victim of extreme multiple compression as growth investors abandon the stock over very real concerns.