MKTX
MarketAxess Holdings Inc.
$115.50
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 31.6% below fair value
You pay
$115.50
Bear
$118.27
Fair
$168.96
Bull
$219.65
Bear
$118.27
+2.4%
ROTCE 20.0% → 3.15x TBV
Fair
$168.96
+46.3%
ROTCE 25.0% → 4.00x TBV
Bull
$219.65
+90.2%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (32.8%) vs. cost of equity (9.1%)
Implied Market Multiple
5.46x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $142.17 from 24 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $168.96 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $48.08 (73% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $142.17 (from 24 analysts). Our estimate is 25% above the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly