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5 Securities & Exchanges Stocks to Track as Industry Dynamics Evolve
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A compelling and diversified product portfolio helps drive the revenues of Zacks Securities and Exchanges industry players. A rise in trading volumes, product expansion through prudent acquisitions and the increased adoption of a greater number of crypto assets are expected to benefit S&P Global (SPGI - Free Report) , Intercontinental Exchange (ICE - Free Report) , CME Group (CME - Free Report) , Nasdaq Inc. (NDAQ - Free Report) and Cboe Global Markets (CBOE - Free Report) . Increased focus on accelerating their non-trading revenue base, which comprises market technology, listing and information revenues, infuses dynamism in the business profile of the industry players. The industry is expected to get an impetus under the Trump administration, given his crypto favoritism. The sector is also witnessing increased retail trading. However, alterations in investment patterns and priorities and compliance with regulations pose challenges. With the increasing digitization of financial markets, cyber threats and data breaches continue to pose serious risks.
About the Industry
The Zacks Securities and Exchanges industry comprises companies that operate electronic marketplaces, which facilitate the buying and selling of stocks, stock options and bonds or commodity contracts. They facilitate trading across a diverse range of products in multiple asset classes and geographies. The companies generate revenues from fees received from the listed companies on their exchanges. They also provide a range of data and listing services to global financial and commodity markets, including pricing and reference data, exchange data, analytics, feeds, index services, investments, risk management, desktops, and connectivity solutions, as well as corporate and ETF listing services, on the cash equity exchanges. The industry is witnessing increased adoption of crypto assets. Yet, industry players have to comply with a number of regulations, resulting in challenges.
4 Trends Shaping the Future of the Securities and Exchanges Industry
Volatility Fueling Trading Volume: The industry players are largely dependent on product and service portfolios for revenues. Major services include trade execution, clearing, settlement services for securities and commodity contracts, listing services, plus trading and clearing systems services. Sustainable trading volume growth, driven by trading volatility, fuels transaction and clearing fees. In a pro-crypto environment and easing regulatory control, trading is expected to increase. Maximizing transaction and clearing fees and the lowering of transaction-based expenses drive profits. Per Technavio, the securities exchanges market in 2028 is expected to reach $49.6 billion at a five-year CAGR of 12.1%, given increasing demand for various investment opportunities. Also, the increased adoption of cryptocurrencies like Bitcoin and Ethereum, among others, is a boon.
Diversification Into Other Recurring Revenue Sources: Securities exchanges are increasingly focusing on recurring revenues to lower reliance on unpredictable trading-driven income. With market volumes often fluctuating, stable revenue streams from data services, listings, clearing, and technology platforms offer consistent cash flows and stronger earnings stability. These revenues support growth by addressing rising demand for market data, compliance, ESG offerings and digital asset infrastructure. Players are strengthening their presence in the evolving landscape as technology and data providers, leveraging cloud, AI and digital assets and are thereby enhancing scalability and margins. Accelerating the non-trading revenue base also infuses dynamism in the business profiles.
Mergers and Acquisitions: M&As are gaining momentum across the industry, with companies leveraging strategic partnerships and acquisitions to fuel growth and innovation. These initiatives help unlock new markets, diversify product offerings and reinforce trading platforms. Coinbase’s recent acquisition of Deribit underscores this trend, strengthening its position in the derivatives market. Such strategic deals not only broaden portfolios but also protect domestic market share while driving global expansion. Deloitte noted that exchanges are increasingly embracing consolidation to adapt to rapidly changing technological, regulatory and competitive environments.
Continuous Investment in Technology: Increasing technology investments to enhance competitiveness and adaptability bodes well. There is growing emphasis on creating strategic market models through advanced tools, especially AI, while continually upgrading products and services. Exchanges are increasingly leveraging AI and blockchain to strengthen efficiency and resilience. Recent advancements use machine learning, automation, and algorithms to improve trading accuracy, reduce cyber threats and limit human errors, thereby accelerating trading speed. Moreover, they are focusing on automating non-trading operations, which significantly contribute to revenue generation and support sustainable long-term growth.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Securities and Exchanges industry is housed within the broader Zacks Finance sector. It carries a Zacks Industry Rank #24, which places it in the top 10% of the 251 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, reflects encouraging near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts have been gaining confidence in this group’s earnings growth potential. Estimates for 2025 have increased 6.9% in a year.
Before we present a few securities and exchanges stocks worth considering for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector and S&P 500
The Zacks Securities and Exchanges industry has outperformed the broader Zacks Finance sector as well as the Zacks S&P 500 composite year to date. The industry has gained 15% compared with the broader sector’s increase of 10.7% and the Zacks S&P 500 composite’s rise of 9.5% in the said time frame.
Year-to-date Price Performance
Industry's Current Valuation
On the basis of trailing 12-month price-to-earnings (P/E), which is commonly used for valuing exchange stocks, the industry is currently trading at 26.32X compared with the S&P 500’s 22.85X and the sector’s 16.89X.
Over the last five years, the industry has traded as high as 29.62X, as low as 20.4X and at the median of 25.31X, as the chart below shows.
Price-to-Book (P/B) Ratio (TTM)
Price-to-Book (P/B) Ratio (TTM)
5 Securities and Exchanges Stocks to Keep An Eye On
Nasdaq: Headquartered in New York, Nasdaq is a leading provider of trading, clearing, marketplace technology, regulatory, securities listing, information, and public and private company services. Its strategy of accelerating its non-trading revenue base, successfully maximizing opportunities as a technology and analytics provider, growing core marketplace businesses and intensifying its focus on Market Technology and Information Services businesses should continue to drive this Zacks Rank #2 stock.
The Zacks Consensus Estimate for 2025 and 2026 earnings per share indicates an increase of 17.4% and 11.5%, respectively, year over year. NDAQ came up with a four-quarter average earnings surprise of 4.36%. The expected long-term earnings growth rate is pegged at 13.8%, better than the industry average of 10.4%. The consensus mark for 2025 and 2026 earnings has moved 2.2% and 1.7% north, respectively, in the past 30 days.
Price and Consensus: NDAQ
S&P Global: Headquartered in New York, this Zacks Rank #2 company is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. It remains well-positioned to gain from the growing demand for business information services. While buyouts help it innovate, increase differentiated content and develop products, continued service launches have been aiding the company's growth and enhancing its market reach.
The Zacks Consensus Estimate for 2025 and 2026 earnings per share indicates an increase of 9.2% and 11%, respectively, year over year. SPGI came up with a four-quarter average earnings surprise of 6.06%. The expected long-term earnings growth rate is pegged at 10.9%, better than the industry average. The consensus mark for 2025 and 2026 earnings has moved 0.8% and 0.7% north, respectively, in the past 30 days.
Price and Consensus: SPGI
Intercontinental Exchange: This Atlanta, GA-based company is a leading global operator of regulated exchanges, clearing houses and listings venues and a provider of data services for commodity, financial, fixed-income and equity markets. Its compelling portfolio, expansive risk-management services, strategic buyouts and a solid balance sheet bode well. It is the second-largest global fixed-income provider. This Zacks Rank #3 company, with the largest mortgage network across the United States, remains well-positioned to benefit from accelerated digitization in the U.S. residential mortgage industry.
The Zacks Consensus Estimate for Intercontinental Exchange’s 2025 and 2026 EPS indicates a year-over-year rise of 15% and 10.8%, respectively. The expected long-term earnings growth rate is pegged at 12.1%, better than the industry average.
Price and Consensus: ICE
CME Group: Headquartered in Chicago, IL, CME Group is the largest futures exchange in the world in terms of trading volume as well as notional value traded. Its efforts to expand future products in emerging markets, non-transaction-related opportunities, OTC offerings, cross-selling through alliances, global presence and liquidity should drive growth.
The Zacks Consensus Estimate for this Zacks Rank #3 company’s 2025 and 2026 EPS indicates a year-over-year increase of 8.6% and 3.8%, respectively. It came up with a four-quarter average earnings surprise of 1.62%. The expected long-term earnings growth rate is pegged at 5.1%. The consensus mark for 2025 and 2026 earnings has moved 0.5% and 0.6% north, respectively, in the past 30 days.
Price and Consensus: CME
Cboe Global Markets: Based in Chicago, IL, Cboe Global is one of the largest stock exchange operators by volume in the United States and globally for ETP trading. This Zacks Rank #3 stock is poised for growth, given its expanding product line across asset classes, broadening geographic reach and a diversifying business mix with recurring revenues and technology.
The Zacks Consensus Estimate for the company’s 2025 and 2026 EPS indicates a year-over-year increase of 11.5% and 5.9%, respectively. The expected long-term earnings growth rate is pegged at 13.8%, better than the industry average. The consensus mark for 2025 and 2026 earnings has moved 0.5% and 0.4% north, respectively, in the past 30 days. It came up with a four-quarter average earnings surprise of nearly 2%.
Price and Consensus: CBOE
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5 Securities & Exchanges Stocks to Track as Industry Dynamics Evolve
A compelling and diversified product portfolio helps drive the revenues of Zacks Securities and Exchanges industry players. A rise in trading volumes, product expansion through prudent acquisitions and the increased adoption of a greater number of crypto assets are expected to benefit S&P Global (SPGI - Free Report) , Intercontinental Exchange (ICE - Free Report) , CME Group (CME - Free Report) , Nasdaq Inc. (NDAQ - Free Report) and Cboe Global Markets (CBOE - Free Report) . Increased focus on accelerating their non-trading revenue base, which comprises market technology, listing and information revenues, infuses dynamism in the business profile of the industry players. The industry is expected to get an impetus under the Trump administration, given his crypto favoritism. The sector is also witnessing increased retail trading. However, alterations in investment patterns and priorities and compliance with regulations pose challenges. With the increasing digitization of financial markets, cyber threats and data breaches continue to pose serious risks.
About the Industry
The Zacks Securities and Exchanges industry comprises companies that operate electronic marketplaces, which facilitate the buying and selling of stocks, stock options and bonds or commodity contracts. They facilitate trading across a diverse range of products in multiple asset classes and geographies. The companies generate revenues from fees received from the listed companies on their exchanges. They also provide a range of data and listing services to global financial and commodity markets, including pricing and reference data, exchange data, analytics, feeds, index services, investments, risk management, desktops, and connectivity solutions, as well as corporate and ETF listing services, on the cash equity exchanges. The industry is witnessing increased adoption of crypto assets. Yet, industry players have to comply with a number of regulations, resulting in challenges.
4 Trends Shaping the Future of the Securities and Exchanges Industry
Volatility Fueling Trading Volume: The industry players are largely dependent on product and service portfolios for revenues. Major services include trade execution, clearing, settlement services for securities and commodity contracts, listing services, plus trading and clearing systems services. Sustainable trading volume growth, driven by trading volatility, fuels transaction and clearing fees. In a pro-crypto environment and easing regulatory control, trading is expected to increase. Maximizing transaction and clearing fees and the lowering of transaction-based expenses drive profits. Per Technavio, the securities exchanges market in 2028 is expected to reach $49.6 billion at a five-year CAGR of 12.1%, given increasing demand for various investment opportunities. Also, the increased adoption of cryptocurrencies like Bitcoin and Ethereum, among others, is a boon.
Diversification Into Other Recurring Revenue Sources: Securities exchanges are increasingly focusing on recurring revenues to lower reliance on unpredictable trading-driven income. With market volumes often fluctuating, stable revenue streams from data services, listings, clearing, and technology platforms offer consistent cash flows and stronger earnings stability. These revenues support growth by addressing rising demand for market data, compliance, ESG offerings and digital asset infrastructure. Players are strengthening their presence in the evolving landscape as technology and data providers, leveraging cloud, AI and digital assets and are thereby enhancing scalability and margins. Accelerating the non-trading revenue base also infuses dynamism in the business profiles.
Mergers and Acquisitions: M&As are gaining momentum across the industry, with companies leveraging strategic partnerships and acquisitions to fuel growth and innovation. These initiatives help unlock new markets, diversify product offerings and reinforce trading platforms. Coinbase’s recent acquisition of Deribit underscores this trend, strengthening its position in the derivatives market. Such strategic deals not only broaden portfolios but also protect domestic market share while driving global expansion. Deloitte noted that exchanges are increasingly embracing consolidation to adapt to rapidly changing technological, regulatory and competitive environments.
Continuous Investment in Technology: Increasing technology investments to enhance competitiveness and adaptability bodes well. There is growing emphasis on creating strategic market models through advanced tools, especially AI, while continually upgrading products and services. Exchanges are increasingly leveraging AI and blockchain to strengthen efficiency and resilience. Recent advancements use machine learning, automation, and algorithms to improve trading accuracy, reduce cyber threats and limit human errors, thereby accelerating trading speed. Moreover, they are focusing on automating non-trading operations, which significantly contribute to revenue generation and support sustainable long-term growth.
Zacks Industry Rank Indicates Bright Prospects
The Zacks Securities and Exchanges industry is housed within the broader Zacks Finance sector. It carries a Zacks Industry Rank #24, which places it in the top 10% of the 251 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, reflects encouraging near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts have been gaining confidence in this group’s earnings growth potential. Estimates for 2025 have increased 6.9% in a year.
Before we present a few securities and exchanges stocks worth considering for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector and S&P 500
The Zacks Securities and Exchanges industry has outperformed the broader Zacks Finance sector as well as the Zacks S&P 500 composite year to date. The industry has gained 15% compared with the broader sector’s increase of 10.7% and the Zacks S&P 500 composite’s rise of 9.5% in the said time frame.
Year-to-date Price Performance
Industry's Current Valuation
On the basis of trailing 12-month price-to-earnings (P/E), which is commonly used for valuing exchange stocks, the industry is currently trading at 26.32X compared with the S&P 500’s 22.85X and the sector’s 16.89X.
Over the last five years, the industry has traded as high as 29.62X, as low as 20.4X and at the median of 25.31X, as the chart below shows.
Price-to-Book (P/B) Ratio (TTM)
Price-to-Book (P/B) Ratio (TTM)
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5 Securities and Exchanges Stocks to Keep An Eye On
We are presenting two Zacks Rank #2 (Buy) stocks and three Zacks Rank #3 (Hold) stocks from the Securities and Exchanges industry. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Nasdaq: Headquartered in New York, Nasdaq is a leading provider of trading, clearing, marketplace technology, regulatory, securities listing, information, and public and private company services. Its strategy of accelerating its non-trading revenue base, successfully maximizing opportunities as a technology and analytics provider, growing core marketplace businesses and intensifying its focus on Market Technology and Information Services businesses should continue to drive this Zacks Rank #2 stock.
The Zacks Consensus Estimate for 2025 and 2026 earnings per share indicates an increase of 17.4% and 11.5%, respectively, year over year. NDAQ came up with a four-quarter average earnings surprise of 4.36%. The expected long-term earnings growth rate is pegged at 13.8%, better than the industry average of 10.4%. The consensus mark for 2025 and 2026 earnings has moved 2.2% and 1.7% north, respectively, in the past 30 days.
Price and Consensus: NDAQ
S&P Global: Headquartered in New York, this Zacks Rank #2 company is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. It remains well-positioned to gain from the growing demand for business information services. While buyouts help it innovate, increase differentiated content and develop products, continued service launches have been aiding the company's growth and enhancing its market reach.
The Zacks Consensus Estimate for 2025 and 2026 earnings per share indicates an increase of 9.2% and 11%, respectively, year over year. SPGI came up with a four-quarter average earnings surprise of 6.06%. The expected long-term earnings growth rate is pegged at 10.9%, better than the industry average. The consensus mark for 2025 and 2026 earnings has moved 0.8% and 0.7% north, respectively, in the past 30 days.
Price and Consensus: SPGI
Intercontinental Exchange: This Atlanta, GA-based company is a leading global operator of regulated exchanges, clearing houses and listings venues and a provider of data services for commodity, financial, fixed-income and equity markets. Its compelling portfolio, expansive risk-management services, strategic buyouts and a solid balance sheet bode well. It is the second-largest global fixed-income provider. This Zacks Rank #3 company, with the largest mortgage network across the United States, remains well-positioned to benefit from accelerated digitization in the U.S. residential mortgage industry.
The Zacks Consensus Estimate for Intercontinental Exchange’s 2025 and 2026 EPS indicates a year-over-year rise of 15% and 10.8%, respectively. The expected long-term earnings growth rate is pegged at 12.1%, better than the industry average.
Price and Consensus: ICE
CME Group: Headquartered in Chicago, IL, CME Group is the largest futures exchange in the world in terms of trading volume as well as notional value traded. Its efforts to expand future products in emerging markets, non-transaction-related opportunities, OTC offerings, cross-selling through alliances, global presence and liquidity should drive growth.
The Zacks Consensus Estimate for this Zacks Rank #3 company’s 2025 and 2026 EPS indicates a year-over-year increase of 8.6% and 3.8%, respectively. It came up with a four-quarter average earnings surprise of 1.62%. The expected long-term earnings growth rate is pegged at 5.1%. The consensus mark for 2025 and 2026 earnings has moved 0.5% and 0.6% north, respectively, in the past 30 days.
Price and Consensus: CME
Cboe Global Markets: Based in Chicago, IL, Cboe Global is one of the largest stock exchange operators by volume in the United States and globally for ETP trading. This Zacks Rank #3 stock is poised for growth, given its expanding product line across asset classes, broadening geographic reach and a diversifying business mix with recurring revenues and technology.
The Zacks Consensus Estimate for the company’s 2025 and 2026 EPS indicates a year-over-year increase of 11.5% and 5.9%, respectively. The expected long-term earnings growth rate is pegged at 13.8%, better than the industry average. The consensus mark for 2025 and 2026 earnings has moved 0.5% and 0.4% north, respectively, in the past 30 days. It came up with a four-quarter average earnings surprise of nearly 2%.
Price and Consensus: CBOE
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