The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how MarketAxess (NASDAQ: MKTX) and the rest of the financial exchanges & data stocks fared in Q3.
Financial exchanges and data providers operate trading platforms and sell market information. They enjoy relatively stable revenue from trading fees and subscriptions, increasing demand for data analytics, and expansion opportunities in emerging markets. Challenges include regulatory oversight of market structure, competition from alternative trading venues, and substantial technology investments needed to maintain low-latency trading infrastructure and data security.
The 10 financial exchanges & data stocks we track reported a satisfactory Q3. As a group, revenues beat analysts’ consensus estimates by 0.9%.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
MarketAxess (NASDAQ: MKTX)
Pioneering the shift from phone-based to electronic bond trading since 2000, MarketAxess (NASDAQ: MKTX) operates electronic trading platforms that enable institutional investors and broker-dealers to efficiently trade fixed-income securities like corporate and government bonds.
MarketAxess reported revenues of $208.8 million, up 1% year on year. This print exceeded analysts’ expectations by 0.7%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
Interestingly, the stock is up 2.4% since reporting and currently trades at $169.75.
Is now the time to buy MarketAxess? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Moody's (NYSE: MCO)
Founded in 1900 during America's railroad boom when investors needed reliable information on bond risks, Moody's (NYSE: MCO) provides credit ratings, risk assessment tools, and analytical solutions that help organizations evaluate financial risks and make informed investment decisions.
Moody's reported revenues of $2.01 billion, up 10.7% year on year, outperforming analysts’ expectations by 2.4%. The business had a very strong quarter with an impressive beat of analysts’ Investor Services segment estimates and a solid beat of analysts’ EBITDA estimates.
Moody's scored the biggest analyst estimates beat among its peers. The market seems content with the results as the stock is up 1.4% since reporting. It currently trades at $491.46.
Is now the time to buy Moody's? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: FactSet (NYSE: FDS)
Founded in 1978 when financial data was still primarily delivered through paper reports, FactSet (NYSE: FDS) provides financial data, analytics, and technology solutions that investment professionals use to research, analyze, and manage their portfolios.
FactSet reported revenues of $596.9 million, up 6.2% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a slower quarter as it posted full-year EPS guidance meeting analysts’ expectations and a significant miss of analysts’ EPS estimates.
As expected, the stock is down 19.2% since the results and currently trades at $271.16.
Read our full analysis of FactSet’s results here.
Intercontinental Exchange (NYSE: ICE)
Starting as an energy trading platform in 2000 before acquiring the iconic New York Stock Exchange in 2013, Intercontinental Exchange (NYSE: ICE) operates global financial exchanges, clearing houses, and provides data services and mortgage technology solutions to financial institutions and corporations.
Intercontinental Exchange reported revenues of $2.41 billion, up 2.6% year on year. This print was in line with analysts’ expectations. Zooming out, it was a satisfactory quarter as it also produced an impressive beat of analysts’ Exchanges segment estimates but revenue in line with analysts’ estimates.
The stock is up 2.1% since reporting and currently trades at $153.76.
MSCI (NYSE: MSCI)
Originally known as Morgan Stanley Capital International before becoming independent in 2007, MSCI (NYSE: MSCI) provides critical decision support tools, indexes, and analytics that help global investors understand risk and return factors and build more effective investment portfolios.
MSCI reported revenues of $793.4 million, up 9.5% year on year. This number met analysts’ expectations. Aside from that, it was a mixed quarter as it also logged a beat of analysts’ EPS estimates but EBITDA in line with analysts’ estimates.
MSCI had the weakest performance against analyst estimates among its peers. The stock is up 6.3% since reporting and currently trades at $581.38.
Read our full, actionable report on MSCI here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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