Tradeweb Markets Inc. (TW): A Bull Case Theory 

We came across a bullish thesis on Tradeweb Markets Inc. on R. Dennis’s Substack’s Substack by OppCost. In this article, we will summarize the bulls’ thesis on TW. Tradeweb Markets Inc.’s share was trading at $111.97 as of September 22nd. TW’s trailing and forward P/E were 43.23 and 32.47 respectively according to Yahoo Finance.

Tradeweb Markets Inc. (TW) has emerged as one of the premier global operators of electronic marketplaces, uniquely positioned at the heart of the secular shift toward the electronification of fixed-income and derivatives trading. Over the five years from 2020 to 2024, the company has compounded revenues at nearly 18% annually, with 2024 revenues reaching $1.73 billion, supported by broad-based growth across rates, credit, and money markets.

Its highly scalable, capital-light model consistently delivers gross margins above 90% and EBITDA margins above 50%, translating top-line expansion directly into robust profitability. Net income reached $502 million in 2024, with EPS compounding at over 26% annually since 2020. A fortress balance sheet, with more than $1.6 billion in net cash and negligible debt, underpins its financial strength, enabling both disciplined acquisitions and substantial shareholder returns.

The company’s competitive moat rests on its powerful network effect, drawing dealers and asset managers into a virtuous cycle of liquidity that is difficult to replicate. Tradeweb has built a diversified platform spanning rates, credit, ETFs, repos, and market data, giving it a sticky, cross-sell-driven ecosystem. Strategic initiatives—including expansion into credit, portfolio trading, and international markets—have reinforced its leadership, with international revenues growing more than 36% in 2024.

While the stock trades at a premium multiple relative to peers, this valuation is justified by superior growth, operating leverage, and durable returns on capital. Risks include competition from MarketAxess, market-cycle sensitivity, and regulatory oversight, yet its diversified revenue mix and network moat mitigate these exposures.

DCF analysis suggests intrinsic value of ~$125 per share, implying modest near-term upside, but a 20%+ five-year forward IRR supports a compelling long-term thesis. With secular growth tailwinds, proven execution, and significant financial flexibility, Tradeweb represents a high-quality compounder and a core holding for long-term, growth-oriented investors.

Previously we covered a bearish thesis on MarketAxess Holdings Inc. (MKTX) by Dan in November 2024, which highlighted overvaluation, operational inefficiencies, and limited upside from portfolio and block trading challenges. The company’s stock price has depreciated approximately by 33.25% since our coverage. The thesis still stands as MKTX faces ongoing execution risks. OppCost shares a contrarian but emphasizes Tradeweb Markets’ secular growth, scalable model, and network moat.

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Disclosure: None.