As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q2. Today, we are looking at financial exchanges & data stocks, starting with Morningstar (NASDAQ: MORN).
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 Q2. As a group, revenues beat analysts’ consensus estimates by 1.1%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10.6% since the latest earnings results.
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 $605.1 million, up 5.8% year on year. This print exceeded analysts’ expectations by 1.4%. Overall, it was a strong quarter for the company with a solid beat of analysts’ Transaction-Based segment estimates and an impressive beat of analysts’ EBITDA estimates.
"PitchBook, Morningstar Direct Platform, and Morningstar Credit led the way in the second quarter, contributing to solid growth," said Kunal Kapoor, Morningstar's chief executive officer.
The stock is down 20.7% since reporting and currently trades at $226.12.
Best Q2: Moody's (NYSE: MCO)
Founded in 1900 during America's railroad boom when investors needed reliable information on bond risks, Moody's (NYSE: MCO) provides credit ratings, risk assessment tools, and analytical solutions that help organizations evaluate financial risks and make informed investment decisions.
Moody's reported revenues of $1.90 billion, up 4.5% year on year, outperforming analysts’ expectations by 2.9%. The business had a strong quarter with a solid beat of analysts’ Investor Services segment estimates and an impressive beat of analysts’ EBITDA estimates.
Moody's delivered the biggest analyst estimates beat among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 2.8% since reporting. It currently trades at $485.04.
Is now the time to buy Moody's? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q2: Tradeweb Markets (NASDAQ: 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.
Tradeweb Markets reported revenues of $513 million, up 26.7% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates and transaction volumes in line with analysts’ estimates.
As expected, the stock is down 20.4% since the results and currently trades at $109.98.
Read our full analysis of Tradeweb Markets’s results here.
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 $772.7 million, up 9.1% year on year. This number surpassed analysts’ expectations by 0.6%. Taking a step back, it was a mixed quarter as it underperformed in some other aspects of the business.
The stock is down 1.8% since reporting and currently trades at $567.88.
Read our full, actionable report on MSCI here, it’s free for active Edge members.
CME Group (NASDAQ: CME)
Born from the Chicago Mercantile Exchange founded in 1898 as a butter and egg trading venue, CME Group (NASDAQ: CME) operates the world's largest derivatives marketplace where traders can buy and sell futures and options contracts across interest rates, equities, currencies, commodities, and more.
CME Group reported revenues of $1.69 billion, up 10.5% year on year. This print met analysts’ expectations. Aside from that, it was a mixed quarter as it failed to impress in some other areas of the business.
The stock is down 3.6% since reporting and currently trades at $264.99.
Read our full, actionable report on CME Group here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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