TW Stock Study (6-8-26)

Posted by Mark on July 14, 2026 at 06:57 | Last modified: June 7, 2026 09:25

I recently did a stock study on Tradeweb Markets Inc. (TW, $102.53).

M* writes:

     > Founded in 1998 and headquartered in New York City, Tradeweb
     > Markets is a leading fixed-income trading platform. While it does
     > offer electronic processing for some voice-negotiated trades,
     > the company focuses primarily on providing electronic trading
     > networks that connect broker/dealers, institutional clients,
     > and retail customers. While the company offers trading in a
     > wide variety of products, the bulk of its business is in US
     > and European government debt, mortgage-backed securities,
     > interest-rate swaps, and US and international corporate bonds.
     > The firm also sells fixed-income trading and price data,
     > primarily through a deal with Refinitiv’s Eikon service.

Since public trading begins in 2019, this medium-size company grows sales and EPS 17.3% and 28.5% per year, respectively. Lines are up, mostly straight, and parallel. 10-year EPS R^2 is 0.85 and Value Line (VL) gives a perfect Earnings Predictability score of 100. Shares outstanding increase 37.3% (5.4%/year).

Since 2019, PTPM trails industry averages but leads peers despite increasing from 29.1% to 57.2% (’25) with a last-5-year mean of 42.6%. ROE trails peer and industry averages despite increasing from 4.6% in ’19 to 12.8% in ’25 with a last-5-year mean of 7.9% (shareholder equity consistently positive and increasing with 11.5% CAGR). Debt-to-Capital is much less than peer and industry averages with a 5-year mean of 0.9% (no long-term debt).

Quick ratio is 3.6 and interest coverage 636 per M* who assigns “Wide” Economic Moat, “Exemplary” rating for Capital Allocation, and an A grade for Financial Health (per BetterInvesting® website). VL gives an A grade for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 13.3% and 11.0% for ’26 and ’27, respectively (based on 13 analysts).
• Zacks gives YOY ACE 13.8% and 10.9% for ’26 and ’27 (13 analysts).
• VL projects 6.8% per year from ’25 to ’30.
• CFRA gives ACE 14.4% YOY and 12.7% per year for ’26 and ’25-’27, respectively (13).
• M* gives 2-year ACE of 10.3% per year and projects an 8.7% CAGR in Equity Report.

My 6.0% forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 15.3% and 14.4% per year for ’25-’27 and ’25-’28, respectively (based on 16 analysts).
• Nasdaq.com gives ACE 12.2% and 12.3% per year for ’26-’28 and ’26-’29 (14 / 8 / 4 analysts for ’26 / ’28 / ’29).
• Seeking Alpha projects 4-year CAGR of 15.9%.
• Finviz gives 5-year annualized ACE of 14.1% (1).
• LSEG projects LTG of 15.0%.
• YF gives YOY ACE 16.8% and 12.7% for ’26 and ’27, respectively (14).
• Zacks gives YOY ACE 15.3% and 13.0% for ’26 and ’27 along with 5-year CAGR of 16.8% (14).
• VL projects 9.6% per year from ’25 to ’30.
• CFRA gives ACE 7.1% YOY and 10.0% per year for ’26 and ’25-’27 (14).
• M* gives long-term ACE of 15.0% per year and also projects 15.0% in Equity Report.

My 9.0% forecast is below the long-term-estimate range (mean of seven: 14.5%). Initial value is ’25 EPS of $3.78/share rather than 2026 Q1 EPS of $4.04 (TTM).

My Forecast High P/E is 35.0. Since 2019, high P/E ranges from 40.4 in ’25 to 62.6 in ’19 (excluding outlier of 93.5 in ’21) with last-5-year mean of 56.4 and a last-5-year-mean average P/E (also excluding ’21 low P/E) of 47.3. I am below the range.

My Forecast Low P/E is 20.0. Since 2019, low P/E falls from 41.8 to 26.9 (’25) with last-5-year mean (excluding upside outlier of 54.3 in ’21) of 34.0. I am forecasting below the range.

My Low Stock Price Forecast (LSPF) of $75.60 is default based on initial value from above: 26.3% less than previous close and 19.8% less than the 52-week low.

Since 2019, Payout Ratio (PR) falls from 29.8% to 12.7% (’25) with a last-5-year mean of 20.4%. I am forecasting below the range at 12.0%.

These inputs land TW in the BUY zone with a U/D ratio of 4.3. Total Annualized Return (TAR) is 15.5%.

PAR (using Forecast Average—not High—P/E) of 10.2% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on only 25 studies done in the past 90 days (16 outliers including mine excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 9.9%, 12.0%, 40.0, 30.0, and 20.4%, respectively. I am lower across the board. VL projects average annual P/E of 40.0 that is higher than MS (35.0) and much higher than mine (27.5).

MS high / low EPS are $6.90 / $3.92 versus my $5.82 / $3.78 (per share). My high EPS is less mainly due to a lower growth rate. Interestingly, VL (M*) projects high EPS of $5.50 ($5.12) that is lower than both.

MS LSPF of $90.10 implies a Forecast Low P/E of 23.0: less than the above-stated 30.0. MS LSPF is 23.4% less than the default $3.92/share * 30.0 = $117.60 resulting in more conservative zoning. MS LSPF is 19.2% greater than mine, though.

MOS is robust in the study because my inputs are less than or near historical/analyst/MS averages/ranges. MS TAR exceeding mine by 4.8% supports the assessment along with my substantially lower LSPF.

With regard to valuation, PEG is 1.5 and 2.5 per Zacks and my projected P/E: slightly overvalued on average (0.8 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is quite low at 0.53. “Quick and Dirty” DCF calculates undervalued by 38% while M* reports the stock at a 16% discount.

Per U/D, TW is a BUY right now under $107/share. Given a forecast high price ~$204, the BetterInvesting® TAR criterion is met [203.7 / ((14.57 / 100 ) +1 ) ^ 5] ~ $103.

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