We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Nasdaq (NDAQ) Gains 20% YTD: Will the Rally Continue?
Read MoreHide Full Article
Nasdaq (NDAQ - Free Report) shares have gained 20.3% year to date compared with the industry's rally of 9.1% and the Finance sector’s decrease of 4.2%. The Zacks S&P 500 composite has risen 16.9% in the same time frame. With market capitalization of $21.2 billion, average volume of shares traded in the last three months was 0.9 million.
Focus on Market Technology and Information Services businesses, improving operating leverage and solid capital position continue to drive Nasdaq. The company has a solid track of delivering earnings beat in the last seven quarters.
The company has been continually improving its return on equity (ROE) since 2014.Its ROE of 17.2% in the trailing 12 months was better than the industry average of 11.7%, reflecting the company’s efficiency in utilizing shareholders’ fund. The Zacks Rank #2 (Buy) leading provider of trading, clearing, marketplace technology, regulatory, securities listing and information targets double-digit total shareholders return.
Will the Bull Run Continue?
The Zacks Consensus Estimate for 2021 earnings has moved up 0.2%% in the past seven days, reflecting analysts’ optimism. The consensus estimate indicates year-over-year increase of 1.3%.
The company boasts significant and leading positions in large, high growth markets like Index, Analytics, Market Technology, and IR & ESG Services.
Nasdaq has been effectively accelerating its non-trading revenue base, which is fueling organic growth. It projects organic revenue growth of 8-11% in Market Technology, 5-8% in Information Services and 3-5% in Corporate Services over the medium term. It has considerably increased scale in Market Technology with revenues growing 45% since 2016.
Nasdaq has invested $1.2 billion in growth platforms and targets a significant share of more than $22 billion addressable market.
The company expects 5% to 7% organic revenue growth from non-trading segments over the medium term against about 3% rise in operating expense, thus improving operating leverage. Its non GAAP operating margin has expanded 400 basis points since 2016.
It targets 5% to 8% of revenues generated from new trading offerings and products by 2025.
Nasdaq boasts a healthy balance sheet and cash position along with modest operating cash flow from its diverse business model. With no long term debt maturities until 2023, it has been effectively improving leverage.
With respect to enhancing shareholders value, the company has increased dividend at a five-year CAGR (2016-2020) of 14%. With a payout of 39%, its dividend yield of 1.5% is higher than the industry average of 1.4%. The company also had $446 million remaining under its share repurchase authorization as of Sep 30, 2020.
MarketAxess delivered a positive earnings surprise of 2.30% in the last reported quarter.
OTC Markets Group delivered a positive earnings surprise of 12.12% in the last reported quarter.
Allstate delivered a positive earnings surprise of 66.10% in the last reported quarter.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
Image: Bigstock
Nasdaq (NDAQ) Gains 20% YTD: Will the Rally Continue?
Nasdaq (NDAQ - Free Report) shares have gained 20.3% year to date compared with the industry's rally of 9.1% and the Finance sector’s decrease of 4.2%. The Zacks S&P 500 composite has risen 16.9% in the same time frame. With market capitalization of $21.2 billion, average volume of shares traded in the last three months was 0.9 million.
Focus on Market Technology and Information Services businesses, improving operating leverage and solid capital position continue to drive Nasdaq. The company has a solid track of delivering earnings beat in the last seven quarters.
The company has been continually improving its return on equity (ROE) since 2014.Its ROE of 17.2% in the trailing 12 months was better than the industry average of 11.7%, reflecting the company’s efficiency in utilizing shareholders’ fund. The Zacks Rank #2 (Buy) leading provider of trading, clearing, marketplace technology, regulatory, securities listing and information targets double-digit total shareholders return.
Will the Bull Run Continue?
The Zacks Consensus Estimate for 2021 earnings has moved up 0.2%% in the past seven days, reflecting analysts’ optimism. The consensus estimate indicates year-over-year increase of 1.3%.
The company boasts significant and leading positions in large, high growth markets like Index, Analytics, Market Technology, and IR & ESG Services.
Nasdaq has been effectively accelerating its non-trading revenue base, which is fueling organic growth. It projects organic revenue growth of 8-11% in Market Technology, 5-8% in Information Services and 3-5% in Corporate Services over the medium term. It has considerably increased scale in Market Technology with revenues growing 45% since 2016.
Nasdaq has invested $1.2 billion in growth platforms and targets a significant share of more than $22 billion addressable market.
The company expects 5% to 7% organic revenue growth from non-trading segments over the medium term against about 3% rise in operating expense, thus improving operating leverage. Its non GAAP operating margin has expanded 400 basis points since 2016.
It targets 5% to 8% of revenues generated from new trading offerings and products by 2025.
Nasdaq boasts a healthy balance sheet and cash position along with modest operating cash flow from its diverse business model. With no long term debt maturities until 2023, it has been effectively improving leverage.
With respect to enhancing shareholders value, the company has increased dividend at a five-year CAGR (2016-2020) of 14%. With a payout of 39%, its dividend yield of 1.5% is higher than the industry average of 1.4%. The company also had $446 million remaining under its share repurchase authorization as of Sep 30, 2020.
Other Stocks to Consider
Some other top-ranked companies from the finance sector are MarketAxess Holdings (MKTX - Free Report) , OTC Markets Group (OTCM - Free Report) and The Allstate Corporation (ALL - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MarketAxess delivered a positive earnings surprise of 2.30% in the last reported quarter.
OTC Markets Group delivered a positive earnings surprise of 12.12% in the last reported quarter.
Allstate delivered a positive earnings surprise of 66.10% in the last reported quarter.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>