Will Lower U.S. High-Yield Trading Affect MarketAxess' Q4 Earnings?

Electronic trading platform MarketAxess Holdings Inc. MKTX is set to report fourth-quarter 2024 results on Feb. 6, 2025, before the opening bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $1.70 per share on revenues of $203.35 million.See the Zacks Earnings Calendar to stay ahead of market-making news.Fourth-quarter earnings estimates have been revised downward over the past month. The bottom-line projection indicates a decrease of 7.6% from the year-ago reported number. However, the Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 3.1%. Image Source: Zacks Investment ResearchFor 2024, the Zacks Consensus Estimate for MarketAxess’ revenues is pegged at $818 million, implying a rise of 8.7% year over year. Also, the consensus mark for 2024 earnings per share is pegged at $7.25, indicating a growth of around 5.8% on a year-over-year basis.MarketAxess has a robust history of surpassing earnings estimates, beating the consensus estimate in each of the last four quarters, with the average surprise being 4.2%. This is depicted in the figure below.MarketAxess Holdings Inc. Price and EPS Surprise MarketAxess Holdings Inc. price-eps-surprise | MarketAxess Holdings Inc. QuoteQ4 Earnings Whispers for MarketAxessHowever, our proven model does not conclusively predict an earnings beat for the company this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the odds of an earnings beat, but that’s not the case here.MKTX has an Earnings ESP of -0.75% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.You can see the complete list of today’s Zacks #1 Rank stocks here.What’s Shaping MarketAxess’ Q4 Results?Higher trading volumes and strong estimated market share gains across most of its credit product lines are likely to have boosted credit commission revenues in the fourth quarter. The Zacks Consensus Estimate for the total trading volume indicates a 33.3% year-over-year increase.Solid trading volumes in the international business of MarketAxess are expected to have driven the company’s overall commissions in the fourth quarter. The consensus mark for Eurobonds trading volumes indicates 14.6% growth from a year ago, while our model estimate suggests an 11.6% increase. Also, the Zacks Consensus Estimate for U.S. high-grade trading volume indicates 14.7% year-over-year growth, whereas our estimate suggests a 17% increase.The Zacks Consensus Estimate for commissions is pegged at $176.7 million, indicating nearly 3% growth from the prior-year quarter’s reported number. Increased utilization of its data product suite and new contracts are likely to have provided an impetus to MarketAxess’ information services revenues in the to-be-reported quarter. The consensus mark for fourth-quarter information services revenues is pinned at $13.1 million, which implies a 9.5% rise from the year-ago quarter’s reported figure.These are likely to have positioned the company for revenue growth in the fourth quarter. However, the upside is likely to have been partly offset by continued decline in the high-yield market. The U.S. high-yield trading is projected to have witnessed an 11.4% decline on the platform for the fourth quarter.Also, we expect total expenses to grow to around $126 million in the fourth quarter, indicating an increase of nearly 5% year over year. Higher employee compensation and benefits, technology and communications costsare likely to have increased expenses, affecting profit growth and making an earnings beat uncertain.Stocks That Warrant a LookWhile an earnings beat looks uncertain for MarketAxess, here are some companies from the broader Finance space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:Crescent Capital BDC, Inc. CCAP has an Earnings ESP of +1.18% and is a Zacks #2 Ranked player.The Zacks Consensus Estimate for Crescent Capital’s bottom line for the to-be-reported quarter is pegged at 56 cents per share, which remained stable over the past month. The consensus estimate for CCAP’s revenues is pegged at $47.01 million.Angel Oak Mortgage REIT, Inc. AOMR has an Earnings ESP of +1.35% and a Zacks Rank of 3.The Zacks Consensus Estimate for Angel Oak’s bottom line for the to-be-reported quarter indicates a 196.2% improvement from a year ago. The consensus mark for AOMR’s revenues signals 22.2% growth year over year.American Homes 4 Rent AMH has an Earnings ESP of +1.84% and a Zacks Rank of 3.The Zacks Consensus Estimate for American Homes’ bottom line for the to-be-reported quarter is pegged at 45 cents per share, indicating a 4.7% increase from the year-ago period. AMH beat earnings estimates in three of the past four quarters and met once, with an average surprise of 2.3%.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report MarketAxess Holdings Inc. (MKTX): Free Stock Analysis Report American Homes 4 Rent (AMH): Free Stock Analysis Report Crescent Capital BDC, Inc. (CCAP): Free Stock Analysis Report Angel Oak Mortgage REIT Inc. (AOMR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks