Valuation Impact Analysis Report on MarketAxess (MKTX)

Based on collected data and market information, I have prepared a comprehensive analysis report for you:

---

MarketAxess Holdings Inc. is a leading global operator of electronic fixed income securities trading platforms, listed on NASDAQ. As of January 9, 2026, the company’s closing price was

, with a market capitalization of [0]. The current share price has fallen approximately from the 52-week high of $232.84, indicating significant valuation pressure.

Metric	Value	Assessment
P/E Ratio (TTM)	28.98x	Relatively high
P/B Ratio	4.62x	Above industry average
DCF Neutral Valuation	$142.41	17.1% discount to current price
DCF Conservative Valuation	$115.40	32.8% discount to current price
DCF Optimistic Valuation	$203.04	18.2% premium to current price

According to monthly trading volume statistics disclosed by the company, the downward trend in bond market activity continued to worsen in 2025:

[1][2]:

• Average Daily Volume (ADV) of U.S. Government Bonds:
  $23.3 billion
  , down
  22%
  year-over-year, and
  9%
  month-over-month
• Total ADV of Interest Rate Products:
  $24.0 billion
  , down
  23%
  year-over-year
• Total ADV of Credit Products:
  $16.0 billion
  , up only
  7%
  year-over-year, and
  1%
  month-over-month
• Total Trading ADV:
  $40.0 billion
  , down
  13%
  year-over-year

FPM is a core indicator measuring the quality of MarketAxess’s revenue, and its decline directly compresses profit margins:

Period	Credit Products FPM	YoY Change	Interest Rate Products FPM	YoY Change
Q4-2024	$154	-	$4.49	-
Q4-2025	$140	-9%	$4.35	-3%

Company management clearly stated in the Q4 earnings report that the decline in FPM is primarily driven by

[2].

The decline in bond market activity directly impacts the company’s revenue through the following channels:

1. Trading Volume Effect
   : A decline in total trading volume directly reduces transaction frequency
2. Fee Rate Effect
   : Declining FPM compresses per-transaction revenue
3. Portfolio Effect
   : The decline in FPM for credit products is greater than that for interest rate products, while credit products are the company’s core profit source

Based on sensitivity analysis, if trading volume falls by

, the revenue index may drop to , and EBITDA margin may decline from 56.5% to [0].

Analysts have lowered their earnings expectations for MarketAxess:

• 2025 EPS Forecast: Lowered from $7.80 to
  $7.41
  (5% decline)
• 2026 EPS Forecast: Lowered from $8.89 to
  $8.26
  (7% decline)
• 2025 Q4 EPS Expectation: $1.71 (to be announced on February 5, 2026)[0]

Market pricing of the company has reflected concerns over deteriorating credit conditions:

1. DCF Valuation Significantly Lower Than Current Share Price
   :
   • Neutral scenario: $142.41, representing a 17.1% discount to the current price
   • Conservative scenario: $115.40, representing a 32.8% discount to the current price

2. Analyst Target Price Cuts
   :
   • UBS
     : Lowered from $255 to $225 (-12%), but maintained a Buy rating[3]
   • Morgan Stanley
     : Downgraded from Overweight to Equal Weight, target price lowered from $247 to $209
   • Bank of America Securities
     : Lowered from $168 to $164, maintained an Underperform rating

3. Consensus Target Price
   :
   $193.00
   , implying limited upside potential of only
   12.3%
   [0]

UBS lowered its target price for MarketAxess from $255 to $225, an adjustment that reflects multiple considerations[3][4]:

1. Weak Credit Metrics
   : The continuous decline in FPM reflects pricing pressure on credit products
2. Market Share Concerns
   : Morgan Stanley noted that “a benign credit environment and robust new issuance environment may squeeze MarketAxess’s market share”[3]
3. Intensified Competition
   : Competitors such as TruMid continue to erode market share
4. Delayed Adoption of Negotiated Agreements
   : Uncertainty exists regarding the adoption timeline for new negotiated agreements

Despite lowering the target price, UBS still maintained a Buy rating based on the following considerations:

1. Long-Term Electronification Trend Remains Intact
   : The structural growth trend of electronic fixed income trading remains solid
2. Credit Cycle Will Eventually Improve
   : The current weak credit environment is cyclical and will eventually recover
3. Reserve of Innovative Products
   : New products such as X-Pro and Adaptive Auto-X are expected to enhance competitiveness
4. Record High Market Share in Portfolio Trading
   : U.S. credit portfolio trading market share reached
   20.6%
   in Q4-25, up from 16.2% last year[2]

Despite challenges in the market environment, the company’s financial fundamentals remain solid[0]:

• Net Profit Margin
  : 26.16%
• Operating Profit Margin
  : 41.20%
• Return on Equity (ROE)
  : 15.97%

• Current Ratio
  : 2.50 (healthy)
• Quick Ratio
  : 2.50
• Debt Risk
  : Low-risk classification

• Classified as having “conservative” accounting policies
• Depreciation/Capital Expenditure ratio indicates potential for asset appreciation

1. Prolonged Slump in Bond Market Activity
   : If the low-interest-rate environment persists, institutional trading willingness will be difficult to recover
2. Market Share Erosion
   : Intensified competition may further erode pricing power
3. Macroeconomic Uncertainty
   : Economic recession risks may hit demand for credit products
4. Sustained Pressure on FPM
   : Changes in negotiated portfolio structure may continue to compress profit margins

1. Long-Term Trend of Fixed Income Electronification
   : A large amount of fixed income trading remains non-electronic, providing significant penetration potential
2. Growth Driven by Innovative Products
   : New products such as X-Pro and Mid-X improve trading efficiency
3. Business Expansion
   : Expansion into municipal bonds and international markets brings incremental revenue
4. Breakthrough in Portfolio Trading
   : Record-high market share demonstrates remaining competitive advantages

Based on current data, MarketAxess’s valuation has partially reflected the impact of declining bond market activity:

• DCF Neutral Valuation ($142.41)
  is at a 17.1% discount to the current share price, indicating cautious market sentiment
• UBS Target Price ($225)
  is at a 30.9% premium to the current share price, reflecting confidence in long-term value
• Consensus Target Price ($193)
  offers a moderate upside potential of 12.3%

The impact of declining bond market activity and deteriorating credit metrics on MarketAxess’s valuation can be summarized as follows:

Impact Dimension	Degree of Impact	Contribution to Valuation Discount
Declining Trading Volume	Medium-term Pressure	~10-15%
Falling FPM	Profit Margin Compression	~5-10%
Slower Growth Expectations	Valuation Multiple Pressure	~5-8%
Intensified Competition	Long-term Uncertainty	~5-10%

, which has been relatively fully priced into the current share price.

1. Monthly Trading Volume Data
   (released monthly): Monitor whether credit product ADV stabilizes
2. FPM Trend
   : Continuous stabilization may indicate easing profit margin pressure
3. Q4-2025 Earnings Report
   (to be released on February 5, 2026): Focus on EPS guidance and management’s outlook on credit conditions
4. Market Share Changes
   : Whether portfolio trading market share can continue to increase

---

[0] Jinling API Data - MarketAxess Real-Time Quotes, Financial Analysis, DCF Valuation and Technical Analysis

[1] MarketAxess Announces Trading Volume Statistics for October 2025 (https://investor.marketaxess.com/news/news-details/2025/MarketAxess-Announces-Trading-Volume-Statistics-for-October-2025/default.aspx)

[2] MarketAxess Announces Trading Volume Statistics for December and Fourth Quarter 2025 (https://sg.finance.yahoo.com/news/marketaxess-announces-trading-volume-statistics-113000002.html)

[3] Yahoo Finance - How Recent Developments Are Shaping the MarketAxess Holdings Investment Story (https://finance.yahoo.com/news/recent-developments-shaping-marketaxess-holdings-091244480.html)

[4] Public.com - MarketAxess Holdings (MKTX) Stock Forecast: Analyst Ratings (https://public.com/stocks/mktx/forecast-price-target)