TMX Group (TSX:X) Stock Faces A Q3 Results Valuation Gap
TMX Group is often treated as a steady gatekeeper of Canadian capital markets, yet Q3 2026 results delivered a more complicated picture. The stock closed at CA$60.07 on October 30 after a strong run over the past quarter, while the latest quarter showed record revenue of CA$491.1m but softer basic earnings per share of CA$0.38. That clash between a rich P/E of 28.1x and a margin rich business with a 30.6% net profit margin is where the expectation gap now sits for investors.
Like the resilience of TMX Group's 30.6% net profit margin but uneasy about paying a 28.1x P/E for softer earnings per share? Compare that profile with our curated list of companies in the list of solid balance sheet and fundamentals stocks (6 results).
Q3 2026 Earnings Summary
- Revenue (Q3 2026 vs. Q3 2025): CA$491.1m vs. CA$418.6m (up 17.3%)
- Net Income, excl. extra items (Q3 2026 vs. Q3 2025): CA$105.8m vs. CA$120.5m (down 12.2%)
- Basic EPS (Q3 2026 vs. Q3 2025): CA$0.38 vs. CA$0.43 (down 12.3%)
- Net Profit Margin, trailing 12 months (Q3 2026 vs. Q3 2025): 30.6% vs. 27.8% (up 2.8 percentage points)
Tired of skimming through dense tables and text to figure out what TMX Group is really doing under the hood? Get a clean, visual snapshot of the business, including how its valuation compares with its recent earnings profile, in our company report for TMX Group.
TMX Group: Recurring Revenue Ambitions Under the Microscope
The bullish pitch is that TMX Group’s data and analytics machine becomes the real engine of the business, not just a supporting act.
"The accelerating expansion of TMX Group’s Global Insights and Data Analytics division is now reinforced by the RAFI Indices acquisition, which is expected to lift this area to 43% of revenue and be accretive to adjusted EPS within 12 months."
Q3 shows that direction is real. Global Insights revenue rose 26%, with Datalinx and VettaFi both strong and Trayport recurring fees also higher. Record group revenue and 21% adjusted diluted EPS growth support the idea that the data mix is helping earnings, even as recent acquisitions bring higher costs.
Stress Testing TMX Group’s Integration And Competition Fears
The bear side worries that an aggressive deal pipeline could stretch TMX Group’s bandwidth and let rivals chip away at liquidity.
"The main thing that has to go right is that TMX Group successfully executes its acquisition and integration program, including RAFI Indices and the Cboe-related deals, while keeping leverage within its targeted range and delivering the planned EPS accretion."
Execution looks mixed. RAFI and TMX Australia are closed and contributing, and adjusted EPS is growing, yet BOX revenue fell 3% as management flagged distraction from the MEMX deal. Net leverage of about 2.3x is within the 1.5 to 2.5x range but moving higher with pending transactions and new debentures.
The price and this Narrative do not agree. → Uncover what this Narrative says TMX Group is actually worth.
Hunt For Quiet Earnings Disconnects
TMX Group’s latest quarter shows how a rich multiple and shifting earnings can pull in different directions. The real opportunity could be spotting stocks that look mispriced before that gap closes.
- Company 1 - 21% below our estimate - turns a growing aerospace and defense backlog into higher margin electronics alongside a new aftermarket-focused acquisition.
- Company 2 - 46% below our estimate - targets higher income shoppers as new stores and a faster e-commerce channel feed a broader omnichannel customer base.
- Company 3 - 35% below our estimate - folds acquired engineering specialists into long term infrastructure and water projects using shared digital tools and centralized delivery hubs.
Three companies from the same screener. Open every one of the 3 undervalued companies on it →
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com