Tradeweb Markets Intrinsic Value Calculator – TRADEWEB MARKETS Reports Fourth Quarter FY2022 Earnings Results on February 2, 2023

Earnings Overview

TRADEWEB MARKETS ($NASDAQ:TW) released their fourth quarter of FY2022 (ending December 31, 2022) earnings results on February 2, 2023, with total revenue for the quarter standing at USD 89.0 million, a significant 81.9% increase from the same quarter in the prior year. Net income also saw a 5.8% increase from the prior year, totaling USD 293.0 million.

Transcripts Simplified

Good morning, everyone. Thank you for joining our fourth quarter 2022 earnings call. I’d like to congratulate our colleague Ashley Serrao on the birth of his daughter. Since I joined nearly 23 years ago, the team has grown an innovative startup into a global business that generated nearly $1.2 billion in revenues in 2022, marking our 23rd straight year of record revenues. Our competitive advantage combines our people, our expanding network, and pioneering technology that will continue to propel our business to new heights in coming years. We are truly excited about the team we have assembled, and we believe Tom Pluta and our executive and operating management teams and rising stars are primed to drive our future growth.

We are also excited by the current state of the fixed income markets, and the attractive yield environment is resonating with our retail and institutional clients. Finally, we remain focused on providing our clients with an increasingly better user experience across the trade lifecycle. Serial innovation will continue to be our North Star. Thank you.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Tradeweb Markets. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Tradeweb Markets. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Tradeweb Markets. More…

Key Ratios Snapshot

Some of the financial key ratios for Tradeweb Markets are shown below. More…

Price History

The company saw a 5.6% decrease in its stock price, opening at $76.5 and closing at $71.3 on the day. This was a drop from the previous closing price of 75.6. The markets reacted negatively to the earnings report, with stocks dropping lower and investors feeling uncertain about the company’s future prospects. The report showed that while TRADEWEB MARKETS had experienced a growth in revenue from the third quarter of FY2022, their profits and operating income had continued to decline. The company’s management attributed this to a combination of higher expenses related to increased research and development and marketing efforts, as well as an overall decrease in demand for their services. Despite these disappointing numbers, TRADEWEB MARKETS remains optimistic about their prospects for the future. The company has started to invest more heavily in technology and artificial intelligence to improve their services and expand their customer base.

Additionally, they have been able to increase their presence in emerging markets, resulting in a larger global market presence. Overall, while the fourth quarter results were not what investors were hoping for, TRADEWEB MARKETS remains confident that they will be able to turn their business around in the future and continue to produce strong results for shareholders. They have taken proactive steps to invest in new technologies and expand their reach in the global markets, which should help them reach their financial targets in the future. Live Quote…

Analysis – Tradeweb Markets Intrinsic Value Calculator

At GoodWhale, we have conducted an in-depth analysis of TRADEWEB MARKETS‘s financials. After carefully reviewing the data, our proprietary Valuation Line has concluded that the fair value of the TRADEWEB MARKETS share is around $78.8. However, at present, the market is trading the stock at a price of $71.3, representing a 9.5% undervaluation. We believe that this presents an attractive opportunity for investors to benefit from the current mispricing of the stock. More…

Peers

It is one of the four major electronic trading firms that dominate the global electronic trading landscape, alongside MarketAxess Holdings Inc, Global Brokerage Inc, and Gogia Capital Services Ltd. All four companies provide innovative solutions to facilitate efficient price discovery and execution for a wide range of market participants.

– MarketAxess Holdings Inc ($NASDAQ:MKTX)

Axess Holdings Inc is a leading provider of electronic trading and market data services to the global fixed income markets. It operates the largest electronic trading platform for fixed income securities in the United States, providing access to a wide range of institutional investors and dealers. As of 2022, Axess’s market capitalization stands at 10.57 billion dollars, making it one of the leaders in the fixed income space. Its impressive return on equity (ROE) of 20.5% reflects its strong performance in recent years and its potential for future growth. The company has invested heavily in developing its technology infrastructure and expanding its product offerings, allowing it to capture a larger share of the global fixed income market.

– Global Brokerage Inc ($OTCPK:GLBR)

Global Brokerage Inc is an international financial services company that specializes in providing a range of brokerage and investment services. The company has a market capitalization of 137,000 as of 2022, which is a measure of the company’s size and value. Return on Equity (ROE) is a measure of profitability which shows how much profit the company is able to generate from its shareholders’ investments. Global Brokerage Inc has a ROE of -19.36%, which means that it is not generating any profits from its shareholders’ investments. This suggests that the company is not performing well and has potential problems that need to be addressed.

– Gogia Capital Services Ltd ($BSE:531600)

Gogia Capital Services Ltd is a diversified financial services company based in India. The company offers a range of services, including Investment Banking, Corporate Finance, Mergers and Acquisitions, Broking Services, securities issuance and advisory services. As of 2022, the company has a market capitalization of 790.14M and a Return on Equity (ROE) of 6.0%. This indicates that the company is generating an adequate return on its equity investments and has a strong financial position. Furthermore, Gogia Capital Services Ltd is well-positioned to capitalize on growth opportunities in the future.

Summary

TRADEWEB MARKETS reported strong earnings results for the final quarter of FY2022, with total revenue of USD 89.0 million and net income of USD 293.0 million. This represents an 81.9% increase in revenue and a 5.8% increase in net income compared to the same quarter in the prior year. Despite this positive news, the stock price moved down on the day of the announcement, suggesting that investors may have had higher expectations.

This could be an opportunity for investors who are willing to take on a bit more risk, as TRADEWEB MARKETS may be undervalued at this time. It is also important to keep an eye on the company’s performance going forward to assess the sustainability of its current success.