MKTX
MarketAxess Holdings Inc.
$137.13
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Fair Value
Trading 24.4% below fair value
You pay
$137.13
Bear
$126.99
Fair
$181.42
Bull
$235.85
Bear
$126.99
-7.4%
ROTCE 20.0% → 2.99x TBV
Fair
$181.42
+32.3%
ROTCE 25.0% → 4.00x TBV
Bull
$235.85
+72.0%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (32.8%) vs. cost of equity (9.4%)
Implied Market Multiple
6.49x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $192.00 from 23 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $181.42 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: $46.14 (74% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
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