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Strength Seen in MarketAxess (MKTX): Can Its 5.1% Jump Turn into More Strength?

MarketAxess (MKTX) shares ended the last trading session 5.1% higher at $364.33. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 1% loss over the past four weeks.

The upside can be attributed to the strength of its diversified product suite that continues to boost the trading volumes of MarketAxess. Its Open Trading platform also drives trading volumes, contributes to revenue growth and sustains investors’ confidence in the stock.

In February 2023, MKTX achieved a record total credit average daily volume (“ADV”) of $14.4 billion. The figure advanced 25% year over year.  Management expects robust industry volumes, estimated market share gains, a favorable macro backdrop and stable average fees per million to aid MarketAxess’ performance for 2023.

This operator of bond trading platforms is expected to post quarterly earnings of $1.95 per share in its upcoming report, which represents a year-over-year change of +12.7%. Revenues are expected to be $203.29 million, up 9.3% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For MarketAxess, the consensus EPS estimate for the quarter has been revised 0.5% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on MKTX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

MarketAxess belongs to the Zacks Securities and Exchanges industry. Another stock from the same industry, IntercontinentalExchange (ICE), closed the last trading session 2.4% higher at $97.67. Over the past month, ICE has returned -12.3%.

ICE's consensus EPS estimate for the upcoming report has changed -0.5% over the past month to $1.34. Compared to the company's year-ago EPS, this represents a change of -6.3%. ICE currently boasts a Zacks Rank of #3 (Hold).

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