We came across a bullish thesis on Marex Group plc (MRX) on Substack by Karst Research. In this article, we will summarize the bulls’ thesis on MRX. Marex Group plc (MRX)'s share was trading at $45.65 as of May 5th. MRX’s trailing and forward P/E were 16.78 and 13.37 respectively according to Yahoo Finance.
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An overview of a commodities exchange room where traders buy and sell futures contracts, physical commodities, and Treasury Bills.
Marex has quietly emerged as a powerhouse in global financial services, with particular dominance in commodities and market access. Though under the radar for many investors, the company’s performance and strategic growth have positioned it as a compelling long-term investment opportunity. The firm, headquartered in London with a global footprint across EMEA, the Americas, and Asia Pacific, operates a highly diversified platform comprising clearing, agency & execution, market making, and hedging & investment solutions. In 2024, Marex generated $1.6 billion in revenue—a 28% year-over-year increase—with profit before tax growing 40% to $321 million and a remarkable 25% return on equity.
Growth at Marex has come from a mix of organic expansion and savvy acquisitions. Since 2021, approximately 60% of its growth has been organic and 40% inorganic. The company completed 17 acquisitions between 2018 and 2024, including ED&F Man Capital Markets in 2022 and Cowen’s prime brokerage business in late 2023, which established Marex’s foothold in hedge fund services. In 2025, Marex announced or completed acquisitions of Hamilton Court Group, Aarna Capital, Darton Commodities, and Edgemere Terminals, signaling a continued appetite to scale across clearing, FX, warehousing, and cobalt trading. These strategic moves have expanded Marex’s capabilities across commodities, fixed income, FX, and equities.
The clearing business is Marex’s crown jewel, contributing $466 million in revenue (29% of total) and a sector-leading $247.3 million in profit before tax. The firm interfaces with 60 global exchanges and cleared over 1.1 billion contracts in 2024—a 30% increase from the prior year. Clearing’s high margins and recurring income profile make it a key driver of financial stability. Meanwhile, the agency & execution segment is Marex’s largest by revenue, generating $695 million (44% of total) from capital markets, securities, and energy brokering. This segment’s prime brokerage arm—bolstered by the Cowen acquisition—serves a diversified client base of asset managers, hedge funds, and producers. It has compounded at 54% from 2021–2024 and remains a high-growth area.
Marex’s market making arm, which earns revenue through spreads by providing liquidity, contributed $208 million in revenue (13% of total) and $66 million in profit before tax. With profitability in 100% of months and 98% of weeks, it offers consistent performance in volatile markets. Lastly, the hedging and investment solutions business delivered $162 million in revenue (10% of total), split between bespoke hedging strategies for commodity clients and structured financial products for wealth managers.
The firm’s income mix—53% from commissions, 31% from trading, and 14% from interest income—mitigates concerns of it being overly reliant on interest rates. Furthermore, Marex’s client base has expanded dramatically, growing from 2,190 in 2021 to 5,031 in 2024, with a sharp increase in high-value clients paying over $1 million annually.
Net interest income (NII) reached $227 million—an 87% surge from the previous year, accounting for 14% of total revenue. This growth stemmed primarily from higher yields on client balances and collateral, driven by elevated interest rates. While this income stream is nearly pure profit, it carries sensitivity to future rate cuts, which could compress earnings if not offset by continued organic growth. The firm’s ability to grow balances and expand commission and trading income offers some insulation, but the impact of rate moves is still substantial, with a 1% rate change affecting profit before tax by roughly $20 million. Marex’s core business, however, remains strong and diversified, helping mitigate this risk. Their short-duration, high-liquidity balance sheet—80% of which supports client activity—limits exposure to long-term rate lock-ins but allows constant turnover, supporting flexibility. While rate tailwinds may moderate, the company’s scale, growth in trading and commission income, and ability to manage rate sensitivity position it well to navigate any future shifts in the macro environment. Overall, Marex’s interest-driven profit growth underlines its operational leverage and resilience in today’s rate environment.
Marex trades at 11.2x NTM P/E and 14.1x LTM P/E—reasonable for a company delivering strong preliminary Q1 2025 results, with adjusted PBT between $92.3M and $97.3M, a major leap from Q1 2024. If double-digit revenue growth and stable margins persist, 2025 net income could reach $300 million, implying a 12x P/E valuation would justify a $3.3B+ market cap, or 22% upside. Trading at 2.5x tangible book (backing out client activity), Marex appears reasonably priced considering its 25% ROE versus StoneX’s 19% and 2.1x P/B multiple. Interest rate risk exists, but as NII’s revenue contribution declines, Marex’s operating business increasingly drives performance. Since 2021, Marex has grown revenue 28%, doubled its client base, and quadrupled large clients generating $1M+, with 60% of this growth organic. With continued margin improvement in 3 of 4 segments and its ability to capture market share amid a shrinking FCM landscape, Marex appears more “growth at a reasonable price” than value. In a volatile macro environment, it remains well-positioned to compound earnings further, especially if 2025’s performance mirrors Q1 momentum.
Marex Group plc (MRX) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held MRX at the end of the fourth quarter which was 18 in the previous quarter. While we acknowledge the risk and potential of MRX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MRX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
