Today we're going to take a closer look at large-cap Finance company Tradeweb Markets, whose shares are currently trading at $69.08. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
Tradeweb Markets's Valuation Is in Line With Its Sector Averages:
Tradeweb Markets Inc. builds and operates electronic marketplaces in the Americas, Europe, the Middle East, Africa, Asia Pacific, and internationally. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 14.34 and an average price to book (P/B) ratio of 1.57. In contrast, Tradeweb Markets has a trailing 12 month P/E ratio of 46.1 and a P/B ratio of 2.88.
Tradeweb Markets's PEG ratio is 2.42, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
The Company Has a Positive Net Current Asset Value:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $776 | $893 | $1,076 | $1,189 |
| Interest Income (MM) | $2 | -$0 | -$2 | $12 |
| Operating Margins | 28.8% | 30.8% | 34.5% | 35.8% |
| Net Margins | 10.8% | 18.63% | 21.07% | 26.02% |
| Net Income (MM) | $84 | $166 | $227 | $309 |
| Depreciation & Amort. (MM) | -$139 | -$154 | -$171 | -$179 |
| Earnings Per Share | $0.54 | $0.88 | $1.09 | $1.5 |
| EPS Growth | n/a | 62.96% | 23.86% | 37.61% |
| Diluted Shares (MM) | 157 | 188 | 207 | 28 |
| Free Cash Flow (MM) | $267 | $401 | $527 | $573 |
| Capital Expenditures (MM) | -$44 | -$43 | -$51 | -$60 |
| Net Current Assets (MM) | $95 | $249 | $442 | $723 |
| Current Ratio | 1.81 | 1.91 | 2.34 | 2.8 |
| Net Debt / EBITDA | -1.53 | -2.01 | -1.91 | -2.13 |
Tradeweb Markets has growing revenues and increasing reinvestment in the business, strong margins with a positive growth rate, and exceptional EPS growth. The company also benefits from a pattern of improving cash flows, an excellent current ratio, and low leverage.
