Over the last six months, Tradeweb Markets’s shares have sunk to $106.21, producing a disappointing 16.1% loss - a stark contrast to the S&P 500’s 14% gain. This may have investors wondering how to approach the situation.
Given the weaker price action, is now a good time to buy TW? Find out in our full research report, it’s free.
Why Are We Positive on TW?
Founded in 1996 as one of the pioneers in electronic bond trading, Tradeweb Markets (NASDAQ: TW) builds and operates electronic marketplaces that connect financial institutions for trading across rates, credit, equities, and money markets.
1. Skyrocketing Revenue Shows Strong Momentum
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
Luckily, Tradeweb Markets’s revenue grew at an impressive 17.6% compounded annual growth rate over the last five years. Its growth surpassed the average financials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable — for example, revenue could be inflated through excessive spending on advertising and promotions.
Tradeweb Markets’s EPS grew at 21% compounded annual growth rate over the last five years, higher than its 17.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Final Judgment
These are just a few reasons Tradeweb Markets is a rock-solid business worth owning. With the recent decline, the stock trades at 24.5× forward P/E (or $106.21 per share). Is now a good time to initiate a position? See for yourself in our in-depth research report, it’s free.
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