MarketAxess Holdings Inc. (MKTX): A Bull Case Theory

We came across a bullish thesis on MarketAxess Holdings Inc. (MKTX) on DIY Investor’s Substack. In this article, we will summarize the bulls’ thesis on MKTX. MarketAxess Holdings Inc. (MKTX)’s share was trading at $224.44 as of 10^th June. MKTX’s trailing and forward P/E were 38.76 and 29.41 respectively according to Yahoo Finance.

MarketAxess Holdings (MKTX) is a dominant force in electronic fixed income trading, specializing in credit products such as U.S. investment-grade, high-yield, Eurobonds, and emerging market debt, with expansion into Treasuries and municipal bonds through strategic acquisitions like LiquidityEdge and MuniBrokers.

The company has also diversified into regulatory services via the Regulatory Reporting Hub. Historically treated as a GARP stock, MKTX traded around 30 P/E with 33% growth post-GFC, peaking at a stretched 73 P/E in 2020. Today, it trades at a more grounded 30 P/E with expected 12% annual growth over the next three years, pricing in solid yet reasonable expectations.

Based on consensus EPS estimates for 2025 and 2026, the stock’s fair value is $243—an 8% premium to the current price of $223, offering a 15% annual return if valuation holds steady. Morningstar echoes this with a $260 fair value, citing a wide moat, exemplary management, and high uncertainty.

MKTX’s economic moat stems from strong network effects, embedded client workflows, proprietary trading protocols, and an unmatched dealer-client ecosystem supporting its Open Trading platform. Its specialization in illiquid and fragmented markets gives it efficient scale, while high operating leverage fuels ongoing R&D without sacrificing margins.

Despite some risks, primarily transaction volume volatility and reliance on variable fees- its global reach and countercyclical traits provide balance. Capital allocation has been disciplined, with $540M in cash, no long-term debt, and prudent buybacks. Selective M&A and consistent investment in machine learning and trading protocols show a forward-looking strategy.

Overall, MKTX presents a resilient, moaty business with attractive upside.

Previously, we covered a bullish thesis on Robinhood (HOOD) from Chit Chat Stocks, which acknowledged the platform’s controversial reputation while emphasizing its explosive asset growth and under-monetized user base as drivers of long-term upside. In contrast, DIY Investor’s thesis on MarketAxess (MKTX) champions a more conventional compounder—a moaty, capital-efficient platform with embedded workflows, steady growth, and network effects—offering a fundamentally sound, lower-volatility path to long-term returns.

MarketAxess Holdings Inc. (MKTX) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held MKTX at the end of the first quarter which was 45 in the previous quarter. While we acknowledge the risk and potential of MKTX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider Monkey.