MarketAxess (MKTX)

We see an opportunity to own a great long term asset that can compound 10%+. We like everything about MKTX, the high quality, low capital intensity, depressed margins, the recent stock weakness, plus the highly likely cyclical rebound.

• The market is worried on two fronts:

  1. Tradeweb taking share

  2. Fee compression which is driven by cyclical factors-

• We think both concerns are overdone. Our 2024 EBITDA estimates are 20% above consensus.

• The challenge has always been valuation, how much should we pay for this sort of asset? After the derating, we think it is easier than it has been.

Potential Upside: $410-$430 (+27%) Sensible Downside: $275 (-18%)

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