How does MKTX's Q1 2025 EPS forecast compare to past trends?

MarketAxess Holdings Inc. (MKTX) is poised for a strong EPS performance in Q1 2025, supported by historical trends and recent strategic initiatives.

1. **Historical EPS Growth Context**: MKTX has demonstrated robust EPS growth over the past years. The 5-year EPS CAGR for MKTX is not available, but the 5-year free cash flow CAGR stands at 7%. This indicates a consistent growth trajectory that supports a positive outlook for Q1 2025 EPS.

2. **Recent Performance and Projections**: In Q4 2024, MKTX reported an EPS of $1.73, which was slightly below estimates. Despite this, the company's full-year EPS increased by 6% to $7.28, surpassing the annual estimate of $7.26. This suggests that while there may have been some minor deviations, the overall trend of EPS growth is strong.
3. **Strategic Positioning for Growth**: MKTX's strategic moves, such as the rollout of block trading and enhancements to portfolio trading, are expected to drive further revenue growth. These initiatives have already contributed to a 9% revenue increase in 2024, marking the strongest annual growth since 2020. The positive momentum from these strategic actions supports the expectation of continued EPS growth in Q1 2025.
4. **Dividend and Shareholder Returns**: MKTX has a history of increasing dividends, with a past decade growth rate of 20.10%. While the dividend yield is currently low at 1.5%, the consistent increase in dividends reflects the company's financial health and confidence in future earnings, which could translate to higher EPS over time.
5. **Market Sentiment and Analysts' Views**: Despite a slight dip in share price following the annual result report, analysts have not significantly altered their price targets, suggesting a positive long-term outlook. This sentiment is reinforced by the company's record revenue growth and successful business enhancements.

In conclusion, MKTX's Q1 2025 EPS forecast is likely to reflect the company's historical growth trajectory and recent strategic successes. The company's strong financial performance, coupled with positive market sentiment, supports a positive outlook for EPS in the upcoming quarter.