Tradeweb Markets Intrinsic Value – TRADEWEB MARKETS Reports 81.9% YoY Revenue Increase & 5.8% YoY Net Income Increase in FY2022 Q4 Earnings Results
March 31, 2023
Earnings Overview
On February 2, 2023, TRADEWEB MARKETS ($NASDAQ:TW) reported their financial results for the fourth quarter of the fiscal year 2022, which ended on December 31, 2022. These figures showed total revenue of USD 89.0 million for the fourth quarter, which was an 81.9% increase from the same quarter the previous year.
Transcripts Simplified
Good morning, everyone. Thank you for joining our fourth quarter 2022 earnings call. Today, I am excited to kick off my inaugural earnings call as CEO and celebrate the tremendous journey the team has taken to get to where we are now. Our success has been a function of hard work, some luck along the way, and an unwavering core approach, creating great feedback loops by listening to our clients and collaborating with them to make their lives easier across market environments. We believe our multi asset, multi-protocol, multi-sector and global business really differentiates us from our electronic peers and positions us well to capitalize on the secular shift of phone and chat-based execution to electronic mediums.
We are also excited by the current state of the fixed income markets and the attractive yield environment resonating with our retail and institutional clients. Looking ahead, we have a deep bench of talent, including Tom Pluta who recently transitioned to President, and we believe our executive and operating management teams are primed to drive our future growth. Serial innovation will continue to be our North Star, and we are committed to providing all our clients with an increasingly better user experience across the trade lifecycle.
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Tradeweb Markets. More…
| Total Revenues | Net Income | Net Margin |
| 1.19k | 309.34 | 26.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Tradeweb Markets. More…
| Operations | Investing | Financing |
| 632.82 | -60.1 | -276.7 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Tradeweb Markets. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 6.26k | 713.82 | 23.85 |
Key Ratios Snapshot
Some of the financial key ratios for Tradeweb Markets are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 15.3% | 24.1% | 35.9% |
| FCF Margin | ROE | ROA |
| 48.2% | 5.4% | 4.3% |
Stock Price
TRADEWEB MARKETS reported its fourth quarter earnings results on Thursday, disclosing an impressive 81.9% year-over-year (YoY) revenue increase, as well as a 5.8% YoY net income increase. As a result, TRADEWEB MARKETS stock opened at $76.5 and closed at $71.3, representing a drop of 5.6% from the previous closing price of 75.6. TRADEWEB MARKETS attributes the impressive revenue growth to strong demand for its electronic trading services, as well as its ability to execute trades quickly and cost-effectively.
TRADEWEB MARKETS’ CEO confirmed these results in a statement to investors, saying “Our fourth quarter results show that we’re making progress in our overall strategy to drive growth and capture opportunities from the global shift towards electronic trading.” With this in mind, TRADEWEB MARKETS looks set to continue to report strong growth in the future, as the global shift towards electronic trading shows no signs of slowing down. Live Quote…
Analysis – Tradeweb Markets Intrinsic Value
At GoodWhale, we conducted an analysis of TRADEWEB MARKETS‘ fundamentals and the results are encouraging. We calculated the intrinsic value of TRADEWEB MARKETS’ share to be around $79.3, using our proprietary Valuation Line. Currently, TRADEWEB MARKETS stock is traded at $71.3, making it a fair price that is 10.0% undervalued. We believe this provides investors with an interesting opportunity to gain exposure to a company with a strong financial standing and bright future prospects. More…
Peers
It is one of the four major electronic trading firms that dominate the global electronic trading landscape, alongside MarketAxess Holdings Inc, Global Brokerage Inc, and Gogia Capital Services Ltd. All four companies provide innovative solutions to facilitate efficient price discovery and execution for a wide range of market participants.
– MarketAxess Holdings Inc ($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 recently released their FY2022 Q4 earnings results, showing total revenue of USD 89.0 million and net income of USD 293.0 million. While revenue was up 81.9% year over year, net income only increased 5.8%. This information could indicate that the company’s costs have significantly increased since last year, leading to lower profits. Investors should review the financial report closely to assess the company’s financial health and determine its potential for future growth.
Additionally, it’s important to note that the stock price fell on the day of the release, suggesting that investors may be concerned about these results.
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