Marketwise, Inc. (MKTW) Stock Analysis and Metrics

Sector: Financial Services Industry: Financial Data & Stock Exchanges CIK: 0001805651

Market Cap 34.42 Mn

P/B -2.37

P/E 5.90

P/S 0.10

ROIC (Qtr) -380.56

Div Yield % 13.79

Rev 1y % (Qtr) -16.38

Total Debt (Qtr) 6.14 Mn

Debt/Equity (Qtr) -0.42

About

Marketwise, Inc. (MKTW) is a leading multi-brand platform of subscription businesses that offers premium financial research, software, education, and tools for self-directed investors. The company was established in 1999 with a vision to publish intelligent, independent, insightful, and in-depth investment research, treating subscribers the way they would want to be treated. Today, Marketwise provides a comprehensive suite of investment research products and solutions that cater to a broad spectrum of investments, including commodities, equities,...

Marketwise, Inc. (MKTW) is a leading multi-brand platform of subscription businesses that offers premium financial research, software, education, and tools for self-directed investors. The company was established in 1999 with a vision to publish intelligent, independent, insightful, and in-depth investment research, treating subscribers the way they would want to be treated. Today, Marketwise provides a comprehensive suite of investment research products and solutions that cater to a broad spectrum of investments, including commodities, equities, distressed debt, and cryptocurrencies.

Marketwise's primary business activities revolve around providing high-quality financial research, software, education, and tools that help self-directed investors make informed decisions. The company operates in the financial services industry and has a global presence, catering to a diverse range of customers, including individual investors, financial advisors, and institutional investors.

Marketwise generates revenue through its diversified product portfolio, which includes 37 free products and 135 paid products across 11 primary customer-facing brands. The company's primary products include Stansberry Research, Chaikin Analytics, InvestorPlace, and TradeSmith, among others. These brands offer a range of products and services, including financial research and analysis, technical analysis software and research tools, online financial news and analysis platforms, and trading software and research tools. Marketwise's research portfolio is 100% digital and channel-agnostic, allowing subscribers to access research across various platforms, including desktop, laptop, tablets, and mobile devices.

Marketwise's competitive advantages lie in its multi-brand approach, which provides a mosaic of opinions, recommendations, and strategies, giving subscribers a diverse range of investment opportunities. The company's research is designed to be less technical and more easily understood by non-finance professionals, making it accessible to a wider audience. Marketwise competes with free online financial news aggregators, traditional financial news publishers, consumer-focused online subscription businesses, institutional financial software providers, and online investing tools.

Marketwise's customers are primarily self-directed investors who are seeking institutional-quality research at an affordable price point. The company's subscribers are diverse, with a range of investment strategies and philosophies. Marketwise's growth strategy is focused on deepening relationships with existing customers, attracting new subscribers, and launching new products and services. The company has a strong track record of driving growth and delivering value through the successful integration of acquisitions and joint ventures.

Marketwise's primary brands include:

1. Stansberry Research: A leading provider of financial research and analysis, offering a range of products and services to individual investors, financial advisors, and institutional investors. The company's research focuses on identifying undervalued and overvalued securities, as well as providing insights on market trends and economic conditions.
2. Chaikin Analytics: A provider of technical analysis software and research tools, offering a range of products and services to individual investors, financial advisors, and institutional investors. The company's research focuses on identifying trends and patterns in financial markets, as well as providing insights on market sentiment and volatility.
3. InvestorPlace: A leading online financial news and analysis platform, offering a range of products and services to individual investors, financial advisors, and institutional investors. The company's research focuses on providing news, analysis, and insights on various financial markets and instruments.
4. TradeSmith: A provider of trading software and research tools, offering a range of products and services to individual investors, financial advisors, and institutional investors. The company's research focuses on identifying trading opportunities and providing insights on market trends and volatility.

Price action

Investment thesis

Bull case

Strong operating cash flow of 27.73M provides robust 4.52x coverage of total debt 6.14M, indicating excellent debt servicing capability and financial flexibility.
Healthy cash reserves of 50.53M provide 64.87x coverage of short-term debt 779000, demonstrating strong liquidity position and minimal refinancing risk.
Strong tangible asset base of 167.65M provides 27.31x coverage of total debt 6.14M, indicating robust asset backing and low credit risk.
Robust free cash flow of 26.80M exceeds capital expenditure of 931000 by 28.78x, indicating strong organic growth funding capability.
Retained earnings of (115.59M) represent substantial 7.96x of equity (14.52M), indicating strong internal capital generation.

Bear case

Operating cash flow of 27.73M barely covers its investment activities of (931000), with a coverage ratio of -29.78, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
Operating cash flow of 27.73M provides thin coverage of dividend payments of (4.20M) with a -6.61 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
Investment activities of (931000) provide weak support for R&D spending of 9.60M, which is -0.10x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
Operating cash flow of 27.73M provides insufficient coverage of deferred revenue obligations of 374.93M, which is 0.07x, raising concerns about future service delivery capabilities.
The company's operating cash flow of 27.73M shows concerning coverage of stock compensation expenses of 11.98M, with a 2.31 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Financial Data & Stock Exchanges

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	SPGI	S&P Global Inc.	157.13 Bn	37.25	10.47	11.87 Bn
2	CME	Cme Group Inc.	96.82 Bn	26.05	15.13	152.46 Bn
3	ICE	Intercontinental Exchange, Inc.	91.82 Bn	29.04	7.33	19.51 Bn
4	MCO	Moodys Corp /De/	90.39 Bn	40.28	12.05	7.36 Bn
5	COIN	Coinbase Global, Inc.	62.10 Bn	19.30	8.10	7.59 Bn
6	NDAQ	Nasdaq, Inc.	54.56 Bn	33.58	6.68	9.55 Bn
7	MSCI	MSCI Inc.	43.97 Bn	35.94	14.39	5.62 Bn
8	CBOE	Cboe Global Markets, Inc.	25.92 Bn	26.50	5.61	1.57 Bn

Industry comparisons

Current Valuation	Value	Ind Avg
EV to Assets EV to Assets	-0.16	2.79
EV to Cash from Ops. EV/CFO	-1.20	33.08
EV to Debt EV to Debt	-5.41	17.54
EV to EBIT EV/EBIT	-8.24	18.27
EV to EBITDA EV/EBITDA	-0.42	20.66
EV to Free Cash Flow [EV/FCF] EV/FCF	-1.24	-39.00
EV to Market Cap EV to Market Cap	-0.96	1.08
EV to Revenue EV/Rev	-0.10	29.85
Price to Book Value [P/B] P/B	-2.37	-0.11
Price to Earnings [P/E] P/E	5.90	23.23

Dividend Metrics	Value	Ind Avg
Dividend Coverage Ratio Div Coverage (Qtr)	1.39	2.12
Dividend Payout Ratio % Div Payout % (Qtr)	65.90	32.37
Dividend per Basic Share Div per Share (Qtr)	1.70	2.63
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr)	15.79	26.82
Interest Coverage Int. cover (Qtr)	-0.76	8.16

Growth Metrics	Value	Ind Avg
Capex Growth (1y) % Capex 1y % (Qtr)	9.35	-11.26
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr)	-46.30	21.19
Dividend Growth (1y) % Div 1y % (Qtr)	-55.26	1.08
EBIAT Growth (1y) % EBIAT 1y % (Qtr)	51.59	10.39
EBITDA Growth (1y) % EBITDA 1y % (Qtr)	11.87	15.05
EBIT Growth (1y) % EBIT 1y % (Qtr)	67.79	17.06
EBT Growth (1y) % EBT 1y % (Qtr)	27.53	21.11
EPS Growth (1y) % EPS 1y % (Qtr)	-7.53	31.00
FCF Growth (1y) % FCF 1y % (Qtr)	330.32	30.56
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr)	-19.68	13.67

Liquidity Ratios	Value	Ind Avg
Asset Utilization Ratio Asset Util Ratio (Qtr)	1.70	0.61
Cash Payout Ratio Cash Payout (Qtr)	0.15	0.24
Cash Ratio Cash Ratio (Qtr)	0.22	0.51
Current Ratio Curr Ratio (Qtr)	0.51	1.97
Debt to Equity Ratio Debt/Equity (Qtr)	-0.42	0.56
Interest Cover Ratio Int Coverage (Qtr)	-0.76	8.16
Times Interest Earned Times Interest Earned (Qtr)	-0.76	8.16

Profitability	Value	Ind Avg
EBITDA Margin % EBITDA Margin % (Qtr)	2.90	-985.15
EBIT Margin % EBIT Margin % (Qtr)	1.18	-991.90
EBT Margin % EBT Margin % (Qtr)	2.72	-1,071.07
Gross Margin % Gross Margin % (Qtr)	87.00	72.61
Net Profit Margin % Net Margin % (Qtr)	1.70	-1,440.85

Marketwise, Inc. (NASDAQ: MKTW)

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Price action

Investment thesis

Bull case

Bear case

Peer comparison

Industry comparisons

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