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Is TMX Group (TSX:X) Undervalued Following Its September Trading Update?

Simply Wall St · 1d ago

TMX Group (TSX:X) released its September 2026 trading statistics, giving investors fresh data on activity across the Toronto Stock Exchange, TSX Venture Exchange, TSX Alpha Exchange, and Montréal Exchange.

TMX Group’s September trading update lands after a softer period for the shares, with the CA$51.7 price reflecting a 1-month share price return down 5.0%, a 90-day gain of 8.0%, and a 5-year total shareholder return of 112.5%, which points to momentum that has built over a much longer stretch.

Scan beyond TMX Group and line up other exchange, data and trading platform stocks using our curated list of 9 high quality undiscovered gems to explore potential under-the-radar opportunities in this corner of the market.

TMX Group looks like a solid market utility on the surface, yet the recent pullback raises a sharper question. Is this quality exchange operator already fully priced, or is it still on reasonable terms at CA$51.7?

Most Popular Narrative: 20.5% Undervalued

On the widely followed narrative, TMX Group screens as undervalued, with a fair value of CA$65.03 set against the latest close at CA$51.70, which puts the recent share pullback into a different light.

The accelerating expansion of TMX's Global Insights and Data Analytics division, including double-digit growth in recurring revenue segments like Trayport and VettaFi, is increasing high-margin, predictable income streams and improving overall net margins. TMX's strategic investments in digital platforms (e.g., post-trade modernization, cloud-based architecture for trading systems, and flexible marketplace technology) directly address the evolving landscape of digital assets and tokenization, providing a future-ready infrastructure and unlocking new sources of transactional and data revenue as digital securities adoption broadens.

See why 30 investors see TMX Group as 20% undervalued.

Using a 7.23% discount rate, that narrative implies a fair value of CA$65.03, which is about 20.5% above the current CA$51.70 price. It leans heavily on TMX Group’s data, derivatives, and digital infrastructure to justify that gap rather than assuming a re-rating based only on higher P/E multiples.

Result: Fair Value of CA$65.03 (UNDERVALUED)

Still, the bullish TMX Group narrative depends on public markets remaining attractive for issuers and on traditional exchanges not being sidelined by blockchain or decentralized trading alternatives.

Find out about the key risks to this TMX Group narrative.

Another View: TMX Group Looks Expensive On Earnings

TMX Group may screen as undervalued on that CA$65.03 fair value, yet its current P/E of 23.6x sits well above both the Canadian Capital Markets industry at 7x and an estimated fair ratio of 20.2x. That richer multiple points to valuation risk if sentiment cools.

For investors weighing that gap, it helps to see how the current pricing compares side by side with peers and with the fair ratio that the market could move towards, then decide whether the premium feels justified or stretched based on personal expectations for TMX Group's future earnings power. See what the numbers say about this price — find out in our valuation breakdown.

TSX:X P/E Ratio as at Oct 2026
TSX:X P/E Ratio as at Oct 2026

Next Steps

Sentiment on TMX Group is split, with some investors seeing upside and others focusing on valuation risk, so it makes sense to inspect the details yourself, pressure test the assumptions that matter to you, and then weigh those findings against the 4 key rewards

Looking for more TMX Group-sized investment ideas?

If TMX Group has you thinking harder about quality and price, do not stop here. Use fresh screeners to surface other opportunities before the crowd catches on.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.