Miami International (MIAX) has experienced a significant stock rally, climbing 47% since August. This impressive performance is primarily attributed to a surge in options trading activity and substantial gains in market share. The company's strong focus on this sector has served as a major catalyst for its rapid expansion and financial success, distinguishing it within the competitive financial landscape.
The company's third-quarter results underscore its robust growth trajectory, highlighting a 57% increase in revenue and an outstanding 157% growth in EBITDA. These figures have propelled MIAX's margins to an impressive 44%, with options trading now constituting 90% of its total revenue. This shift indicates a successful strategic pivot towards high-growth segments, enhancing overall profitability and financial stability.
With a healthy balance sheet, strong incremental margins, and a target of at least $180 million in EBITDA for 2025, MIAX's financial fundamentals remain exceptionally strong. However, given that shares are currently trading close to their fair value of approximately $44, I am adjusting my rating to 'Hold'. Investors may consider acquiring shares during market pullbacks, particularly if prices approach the $40 mark, to capitalize on potential future upside.
MIAX's strategic focus on options trading, coupled with its exceptional financial performance and clear growth targets, positions it as a compelling entity in the financial markets. The company's ability to maintain high margins and achieve significant revenue and EBITDA growth demonstrates a resilient and effective business model. While current valuations suggest a cautious approach, the underlying strength of MIAX's operations and its potential for continued expansion offer a positive long-term outlook for investors.