Spotting winners: MSCI (NYSE:MSCI) and financial exchanges & data stocks in Q3
Looking back on financial exchanges & data stocks’ Q3 earnings, we examine this quarter’s best and worst performers, including MSCI (NYSE:MSCI) and its peers.
Financial exchanges and data providers operate trading platforms and sell market information. They enjoy relatively stable revenue from trading fees and subscriptions, increasing demand for data analytics, and expansion opportunities in emerging markets. Challenges include regulatory oversight of market structure, competition from alternative trading venues, and substantial technology investments needed to maintain low-latency trading infrastructure and data security.
The 10 financial exchanges & data stocks we track reported a mixed Q3. As a group, revenues were in line with analysts’ consensus estimates.
Luckily, financial exchanges & data stocks have performed well with share prices up 10.7% on average since the latest earnings results.
MSCI (NYSE:MSCI)
Originally known as Morgan Stanley Capital International before becoming independent in 2007, MSCI (NYSE:MSCI) provides critical decision support tools, indexes, and analytics that help global investors understand risk and return factors and build more effective investment portfolios.
MSCI reported revenues of $892 million, up 12.4% year on year. This print exceeded analysts’ expectations by 0.6%. Despite the top-line beat, it was still a mixed quarter for the company with a beat of analysts’ EPS estimates.
Interestingly, the stock is up 16.4% since reporting and currently trades at $660.43.
Is now the time to buy MSCI? Access our full analysis of the earnings results here, it’s free.
Best Q3: Morningstar (NASDAQ:MORN)
Founded in 1984 by Joe Mansueto with just $80,000 in personal savings, Morningstar (NASDAQ:MORN) provides independent investment data, research, and analysis tools that help investors, advisors, and institutions make informed financial decisions.
Morningstar reported revenues of $672.1 million, up 8.9% year on year, outperforming analysts’ expectations by 1.3%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
Morningstar achieved the biggest analyst estimate beat of the whole group. The market seems happy with the results as the stock is up 15.1% since reporting. It currently trades at $247.32.
Weakest Q3: MarketAxess (NASDAQ:MKTX)
Pioneering the shift from phone-based to electronic bond trading since 2000, MarketAxess (NASDAQ:MKTX) operates electronic trading platforms that enable institutional investors and broker-dealers to efficiently trade fixed-income securities like corporate and government bonds.
