Not unlike other Technology companies, capital markets-focused FinTech companies have benefited in recent years from the Fed’s persistent low interest rate policy and from the Trump tax cuts. The difference between this FinTech cohort and many Bay Area Enterprise Software companies is that this FinTech group generates meaningful cash flow (29% median Operating Cash Flow margin).
Look no further than fixed income trading platform operator MarketAxess (MKTX) for best-in-class Operating Cash Flow margins (62.1%). However, you will be required to pay a premium as MKTX trades at 50.5x EV/LTM OCF.
Investment Operations technology leader SS&C Technologies (SSNC) sports the highest Operating Cash Flow yield at 8.7% and the lowest EV/ LTM OCF multiple at 16.5x.
We detailed 16 capital markets FinTech companies in our valuation table. Access the PDF version by clicking the thumbnail below.