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Should You Retain Nasdaq (NDAQ) Stock in Your Portfolio?
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Nasdaq Inc. (NDAQ - Free Report) has been in investors’ good books owing to its strategic acquisitions, growing index and analytics businesses, technology expansion, healthy balance sheet and effective capital deployment.
Zacks Rank & Price Performance
Nasdaq currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 12.2% against the industry’s increase of 5.2%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for NDAQ’s 2024 earnings is pegged at $2.75 per share, indicating a 0.1% increase from the year-ago reported figure on 9.5% higher revenues of $4.08 billion.
Return on Equity
The company’s return on equity was 21.9% in the trailing 12 months, which is better than the industry average of 11.8%.
Business Tailwinds
Nasdaq remains focused on repositioning its business and aims to generate revenues from the high-performing division, Market Platforms, which includes Market Technology.
The company intensified its focus toward the Market Technology and Information Services businesses. NDAQ continues to expect 2023 revenue growth for Market Technology at the upper end of its medium-term outlook. Also, technology expansion with SMARTS surveillance in nonfinancial markets testifies the company’s focus on capitalizing on emerging opportunities in the cryptocurrency markets.
NDAQ remains focused on the expansion of Trade Surveillance, data analytics and integrity solutions. In the second quarter of 2022, the company launched its marketplace services platform to provide Market Technology clients with seamless access to standard cloud-based infrastructure component.
Nasdaq also remains focused on improving growth via organic means. The securities exchange expects growth from its index and analytics businesses, followed by a moderate rise in its exchange data products across the U.S. and Nordic equities.
The company is on track with its goals of maximizing opportunities as an innovative analytics and technology partner in the capital markets. It also intends to develop and deploy marketplace economy, technology strategy, and consolidate competitive edge in its core businesses.
NDAQ has grown meaningfully over the years through a number of strategic expansions. These acquisitions have helped the company gain direct access to the Canadian equities market, expand its technology offering and improve its market surveillance techniques.
In June 2023, Nasdaq agreed to acquire a premium software and technology company, Adenza, for $10.5 billion. The acquisition is expected to boost NDAQ’s Marketplace Technology and Anti-Financial Crime solutions as well as strengthen offerings across a wider spectrum of regulatory technology, compliance and risk management solutions.
Adenza expands Nasdaq’s serviceable addressable market by approximately 40% by adding a rising market opportunity with powerful secular growth drivers across regulatory and market reforms, digitization and modernization and vendor simplification as financial institutions move from in-house to trusted-partner solutions.
NDAQ boasts a healthy balance sheet and cash position along with modest operating cash flow from its diverse business model. A healthy balance sheet ensures shareholder-friendly moves like dividend hikes and share repurchases. With the 10% hike in April 2023, the company’s dividend recorded a nine-year (2015-2023) CAGR of 6%. As of Jun 30, 2023, $491 million remained under the board-authorized share repurchase program.
Stocks to Consider
Some better-ranked stocks from the finance sector are CME Group Inc. (CME - Free Report) , Intercontinental Exchange Inc. (ICE - Free Report) and T. Rowe Price Group, Inc. (TROW - Free Report) . While CME Group and Intercontinental Exchange carry a Zacks Rank #2 (Buy) each, T. Rowe Price sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CME Group’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 2.92%. In the past year, CME has gained 1.5%.
The Zacks Consensus Estimate for CME’s 2023 and 2024 earnings per share is pegged at $9.04 and $9.16, indicating a year-over-year increase of 13.4% and 1.3%, respectively.
The Zacks Consensus Estimate for Intercontinental Exchange’s 2023 and 2024 revenues is pegged at $7.69 billion and $8.10 billion, indicating a year-over-year increase of 5.3% and 5.5%, respectively. In the past year, ICE has surged 15.5%.
The Zacks Consensus Estimate for ICE’s 2023 and 2024 earnings has moved 1.6% and 1.15% north, respectively, in the past 30 days.
The Zacks Consensus Estimate for T. Rowe Price’s 2023 and 2024 earnings has both moved 4% north in the past 30 days. In the past year, TROW has lost 6.2%.
The Zacks Consensus Estimate for TROW’s 2024 earnings per share is pegged at $7.46, indicating a year-over-year increase of 3.8%.
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Should You Retain Nasdaq (NDAQ) Stock in Your Portfolio?
Nasdaq Inc. (NDAQ - Free Report) has been in investors’ good books owing to its strategic acquisitions, growing index and analytics businesses, technology expansion, healthy balance sheet and effective capital deployment.
Zacks Rank & Price Performance
Nasdaq currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 12.2% against the industry’s increase of 5.2%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for NDAQ’s 2024 earnings is pegged at $2.75 per share, indicating a 0.1% increase from the year-ago reported figure on 9.5% higher revenues of $4.08 billion.
Return on Equity
The company’s return on equity was 21.9% in the trailing 12 months, which is better than the industry average of 11.8%.
Business Tailwinds
Nasdaq remains focused on repositioning its business and aims to generate revenues from the high-performing division, Market Platforms, which includes Market Technology.
The company intensified its focus toward the Market Technology and Information Services businesses. NDAQ continues to expect 2023 revenue growth for Market Technology at the upper end of its medium-term outlook. Also, technology expansion with SMARTS surveillance in nonfinancial markets testifies the company’s focus on capitalizing on emerging opportunities in the cryptocurrency markets.
NDAQ remains focused on the expansion of Trade Surveillance, data analytics and integrity solutions. In the second quarter of 2022, the company launched its marketplace services platform to provide Market Technology clients with seamless access to standard cloud-based infrastructure component.
Nasdaq also remains focused on improving growth via organic means. The securities exchange expects growth from its index and analytics businesses, followed by a moderate rise in its exchange data products across the U.S. and Nordic equities.
The company is on track with its goals of maximizing opportunities as an innovative analytics and technology partner in the capital markets. It also intends to develop and deploy marketplace economy, technology strategy, and consolidate competitive edge in its core businesses.
NDAQ has grown meaningfully over the years through a number of strategic expansions. These acquisitions have helped the company gain direct access to the Canadian equities market, expand its technology offering and improve its market surveillance techniques.
In June 2023, Nasdaq agreed to acquire a premium software and technology company, Adenza, for $10.5 billion. The acquisition is expected to boost NDAQ’s Marketplace Technology and Anti-Financial Crime solutions as well as strengthen offerings across a wider spectrum of regulatory technology, compliance and risk management solutions.
Adenza expands Nasdaq’s serviceable addressable market by approximately 40% by adding a rising market opportunity with powerful secular growth drivers across regulatory and market reforms, digitization and modernization and vendor simplification as financial institutions move from in-house to trusted-partner solutions.
NDAQ boasts a healthy balance sheet and cash position along with modest operating cash flow from its diverse business model. A healthy balance sheet ensures shareholder-friendly moves like dividend hikes and share repurchases. With the 10% hike in April 2023, the company’s dividend recorded a nine-year (2015-2023) CAGR of 6%. As of Jun 30, 2023, $491 million remained under the board-authorized share repurchase program.
Stocks to Consider
Some better-ranked stocks from the finance sector are CME Group Inc. (CME - Free Report) , Intercontinental Exchange Inc. (ICE - Free Report) and T. Rowe Price Group, Inc. (TROW - Free Report) . While CME Group and Intercontinental Exchange carry a Zacks Rank #2 (Buy) each, T. Rowe Price sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CME Group’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 2.92%. In the past year, CME has gained 1.5%.
The Zacks Consensus Estimate for CME’s 2023 and 2024 earnings per share is pegged at $9.04 and $9.16, indicating a year-over-year increase of 13.4% and 1.3%, respectively.
The Zacks Consensus Estimate for Intercontinental Exchange’s 2023 and 2024 revenues is pegged at $7.69 billion and $8.10 billion, indicating a year-over-year increase of 5.3% and 5.5%, respectively. In the past year, ICE has surged 15.5%.
The Zacks Consensus Estimate for ICE’s 2023 and 2024 earnings has moved 1.6% and 1.15% north, respectively, in the past 30 days.
The Zacks Consensus Estimate for T. Rowe Price’s 2023 and 2024 earnings has both moved 4% north in the past 30 days. In the past year, TROW has lost 6.2%.
The Zacks Consensus Estimate for TROW’s 2024 earnings per share is pegged at $7.46, indicating a year-over-year increase of 3.8%.