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Can Nasdaq (NDAQ) Keep Earnings Beat Streak Alive in Q2?
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Nasdaq, Inc. (NDAQ - Free Report) is slated to report second-quarter 2018 results on Jul 25 before the market opens. Last reported quarter, the company delivered a positive surprise of 5.08%.
Let’s see, how things are shaping up for this announcement.
Nasdaq’s second-quarter performance is expected to have benefited from improvement in trading business and subscription plus recurring revenues besides a heightened focus on core business, solid market share and prudent pricing. The Zacks Consensus Estimate for Market Services revenues is pegged at $175 million, a 21.5% increase from the year-ago period.
Strategic acquisitions and divestitures should have aided the company’s performance.
Volumes in the second quarter were mixed. While U.S. equity options volume grew 8% year over year to 417 million contracts, European options and futures volumes registered 21.9 million contracts, down 1.4% year over year. However, revenues per contract for U.S. equity options remained flat year over year at 15 cents although the same for European options and futures expanded 12.8% to 44 cents.
Listing revenues have possibly increased on the back of higher listings witnessed in the second quarter of 2018. In the same period, there were 3,632 listed companies on Nasdaq compared with 3,512 a year ago. Total listings grew 4% over the year-earlier quarter to 4,021. The Zacks Consensus Estimate for listing services revenues is pegged at $72 million, up 7.5% year over year.
Non-transaction revenues are thus likely to have increased on the strength of listing revenues and information service revenues. Nasdaq identified Market Technology and Information Services businesses to offer the biggest growth opportunities for the company.
Additionally, lower tax incidence, owing to tax reform implemented earlier this year, should provide an extra boost to the bottom line.
The Zacks Consensus Estimate for earnings is pegged at $1.16 per share, reflecting a rise of 13.7% on 2.4% higher revenues of $621.3 million.
Our proven model shows that Nasdaq is likely to beat estimates this reporting cycle. This is because the stock has the right combination of the two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Nasdaq has an Earnings ESP of +0.79%. This is because the Most Accurate Estimate of $1.17 is pegged higher than the Zacks Consensus Estimate of $1.16. Additionally, a positive ESP indicates a likely earnings surprise. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Nasdaq carries a Zacks Rank #3, which increases the predictive power of ESP.
We caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Some other companies worth considering from the finance sector with the right combination of elements to also come up with an earnings beat this time around are as follows:
Atlantic Capital Bancshares, Inc. has an Earnings ESP of +12.05% and a Zacks Rank #2. The company is slated to report second-quarter earnings on Jul 25.
Arthur J. Gallagher & Co. (AJG - Free Report) has an Earnings ESP of +0.63% and is a Zacks #3 Ranked player. The company is slated to announce second-quarter earnings on Jul 26.
AMERISAFE, Inc. (AMSF - Free Report) has an Earnings ESP of +5.68% and is a #3 Ranked player. The company is slated to release second-quarter earnings on Jul 26.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Can Nasdaq (NDAQ) Keep Earnings Beat Streak Alive in Q2?
Nasdaq, Inc. (NDAQ - Free Report) is slated to report second-quarter 2018 results on Jul 25 before the market opens. Last reported quarter, the company delivered a positive surprise of 5.08%.
Let’s see, how things are shaping up for this announcement.
Nasdaq’s second-quarter performance is expected to have benefited from improvement in trading business and subscription plus recurring revenues besides a heightened focus on core business, solid market share and prudent pricing. The Zacks Consensus Estimate for Market Services revenues is pegged at $175 million, a 21.5% increase from the year-ago period.
Strategic acquisitions and divestitures should have aided the company’s performance.
Volumes in the second quarter were mixed. While U.S. equity options volume grew 8% year over year to 417 million contracts, European options and futures volumes registered 21.9 million contracts, down 1.4% year over year. However, revenues per contract for U.S. equity options remained flat year over year at 15 cents although the same for European options and futures expanded 12.8% to 44 cents.
Listing revenues have possibly increased on the back of higher listings witnessed in the second quarter of 2018. In the same period, there were 3,632 listed companies on Nasdaq compared with 3,512 a year ago. Total listings grew 4% over the year-earlier quarter to 4,021. The Zacks Consensus Estimate for listing services revenues is pegged at $72 million, up 7.5% year over year.
Non-transaction revenues are thus likely to have increased on the strength of listing revenues and information service revenues. Nasdaq identified Market Technology and Information Services businesses to offer the biggest growth opportunities for the company.
Additionally, lower tax incidence, owing to tax reform implemented earlier this year, should provide an extra boost to the bottom line.
The Zacks Consensus Estimate for earnings is pegged at $1.16 per share, reflecting a rise of 13.7% on 2.4% higher revenues of $621.3 million.
Nasdaq, Inc. Price and EPS Surprise
Nasdaq, Inc. Price and EPS Surprise | Nasdaq, Inc. Quote
What Our Quantitative Model Says
Our proven model shows that Nasdaq is likely to beat estimates this reporting cycle. This is because the stock has the right combination of the two main ingredients — a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to increase the odds of an earnings surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Nasdaq has an Earnings ESP of +0.79%. This is because the Most Accurate Estimate of $1.17 is pegged higher than the Zacks Consensus Estimate of $1.16. Additionally, a positive ESP indicates a likely earnings surprise. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Nasdaq carries a Zacks Rank #3, which increases the predictive power of ESP.
We caution against Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Other Stocks to Consider
Some other companies worth considering from the finance sector with the right combination of elements to also come up with an earnings beat this time around are as follows:
Atlantic Capital Bancshares, Inc. has an Earnings ESP of +12.05% and a Zacks Rank #2. The company is slated to report second-quarter earnings on Jul 25.
Arthur J. Gallagher & Co. (AJG - Free Report) has an Earnings ESP of +0.63% and is a Zacks #3 Ranked player. The company is slated to announce second-quarter earnings on Jul 26.
AMERISAFE, Inc. (AMSF - Free Report) has an Earnings ESP of +5.68% and is a #3 Ranked player. The company is slated to release second-quarter earnings on Jul 26.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>