Is MarketAxess Holdings, Inc. overvalued or undervalued?

As of 7 July 2025, the valuation grade for MarketAxess Holdings, Inc. has moved from expensive to very expensive, indicating a significant increase in perceived overvaluation. The company appears to be overvalued, particularly when considering its P/E ratio of 41, which is substantially higher than its peer Tradeweb Markets, Inc. with a P/E of 47.50, and its EV to EBITDA ratio of 20.14, which again exceeds the industry average. Additionally, the Price to Book Value stands at 6.66, further emphasizing the high valuation relative to its peers.
In terms of performance, MarketAxess has underperformed significantly compared to the S&P 500, with a year-to-date return of -20.50% versus the S&P 500's 12.22%, and a 5-year return of -59.03% compared to the S&P 500's impressive 96.61%. This stark contrast in returns reinforces the notion that MarketAxess may be overvalued in the current market environment.