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What's in the Cards for Nasdaq (NDAQ) This Earnings Season?
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Nasdaq, Inc. (NDAQ - Free Report) is slated to report fourth-quarter 2021 earnings on Jan 26, before the opening bell. The company delivered an earnings surprise in each of the last four quarters, the average being 8.7%.
Factors to Consider
Nasdaq’s fourth-quarter performance is likely to have benefited from revenue growth in the Solutions segments, organic growth in Market Services business and contributions from the acquisition of Verafin.
Non-trading revenues are expected to have benefited from the better performance of Market Technology and continued strong growth of Market Data, Index and Analytics businesses. Higher SaaS revenues and growing Anti Financial Crime Technology business are likely to have driven Market Technology.
The Zacks Consensus Estimate for Analytics businesses revenues is pegged at $52 million, indicating an increase of 13% from the year-ago reported figure. The consensus estimate for Index revenues is pegged at $123 million, suggesting growth of 26.8% from the year-ago reported figure.
Market Technology revenues are likely to have been driven by the positive impact of the acquisition of Verafin and continued growth in surveillance solutions, growing Anti Financial Crime Technology business, higher change request revenues, higher SaaS revenues and a favorable impact of foreign exchange rates. The Zacks Consensus Estimate for Market Technology revenues is pegged at $128 million, suggesting growth of 20.7% from the prior-year reported figure.
Market Services segment revenues are likely to have been driven by higher organic revenue, higher equity derivatives, cash equities, trade management services revenues, and strong operating leverage on higher trading revenues.
The Investment Intelligence segment is expected to have benefited from higher proprietary data revenues from new sales and a favorable foreign exchange rate impact, higher licensing revenues from an increase in average AUM in ETPs linked to Nasdaq indexes, higher licensing revenues from futures trading linked to the Nasdaq-100 Index as well as growth in eVestment platform driven by new sales, strong retention, and higher average revenue per client from expanded offerings. The Zacks Consensus Estimate for Investment Intelligence segment revenues is pegged at $278 million, indicating a 16.8% increase from the year-ago reported figure.
Solid growth in the Nasdaq-listed issuer base across the U.S. and Nordic markets, organic growth, higher U.S. listings revenues, owing to expansion in the listed-issuer base, increased adoption across the breadth of Investor Relations, and newer ESG Advisory and reporting offerings are likely to have driven the Corporate Platforms segment. The Zacks Consensus Estimate for Corporate Services segment revenues is pegged at $157 million, indicating a 9% increase from the year-ago reported figure.
Q4 Volumes
Nasdaq reported solid volumes for fourth-quarter 2021. U.S. equity options volume increased 9.4% year over year to 811 million contracts. European options and futures volume increased 5.2% year over year to 18.3 million contracts.
Though revenues per contract for U.S. equity options remained flat year over year at 11 cents, the same for European options and futures dropped by a cent to 55 cents.
Under its cash equities, Nasdaq’s U.S. matched equity volume in the fourth quarter grossed 118.6 billion shares, up 2.8% from the prior-year quarter. European equity volume increased 6.4% year over year to $299 billion. Under fixed income commodities, European fixed income volume increased 26.7% to 7.6 million contracts. In the fourth quarter, there were 4,974 listed companies on Nasdaq compared with 4,051 in the year-ago period. Total listings grew 21.3% year over year to 5,415.
The consensus estimate for listing revenues is pegged at $101 million, suggesting growth of 14.8% from the year-ago reported figure.
Expenses are expected to have risen on higher organic growth, increase from the impact of acquisitions and increase from the impact of changes in foreign exchange rates.
Interest expenses are likely to have increased in the fourth quarter due to higher debt balances related to the Verafin acquisition.
Accelerated share repurchase (ASR) is anticipated to have provided an additional boost to the bottom line. Nasdaq expects to receive the remaining shares related to the ASR program in the fourth quarter.
The Zacks Consensus Estimate for earnings stands at $1.78, indicating an 11.2% increase from the prior-year reported figure.
What Our Quantitative Model States
Our proven model does not conclusively predict an earnings beat for Nasdaq this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case as you can see below.
Earnings ESP: Nasdaq has an Earnings ESP of -0.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some stocks from the finance sector with the perfect combination of elements to surpass estimates in their upcoming releases.
Ameriprise Financial (AMP - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank #2. The Zacks Consensus Estimate for AMP’s 2022 earnings implies a year-over-year increase of 10.5%.
AMP’s earnings surpassed estimates in each of the last four quarters, the average beat being 6.4%. The Zacks Consensus Estimate for Ameriprise Financial’s 2022 earnings has moved 1.1% north in the past 30 days.
Hamilton Lane (HLNE - Free Report) has an Earnings ESP of +0.36% and a Zacks Rank #2.
Hamilton Lane’s earnings surpassed estimates in each of the last four quarters, the average beat being 36%. The Zacks Consensus Estimate for HLNE’s 2022 earnings has moved 3.3% north in the past 30 days.
SEI Investments (SEIC - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank #2. The Zacks Consensus Estimate for SEIC’s 2022 earnings implies a year-over-year increase of 8.3%.
SEI Investments' earnings surpassed estimates in three of the last four quarters and missed in one, the average beat being 1.8%. The Zacks Consensus Estimate for SEIC’s 2022 earnings has moved 2% north in the past 30 days.
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What's in the Cards for Nasdaq (NDAQ) This Earnings Season?
Nasdaq, Inc. (NDAQ - Free Report) is slated to report fourth-quarter 2021 earnings on Jan 26, before the opening bell. The company delivered an earnings surprise in each of the last four quarters, the average being 8.7%.
Factors to Consider
Nasdaq’s fourth-quarter performance is likely to have benefited from revenue growth in the Solutions segments, organic growth in Market Services business and contributions from the acquisition of Verafin.
Non-trading revenues are expected to have benefited from the better performance of Market Technology and continued strong growth of Market Data, Index and Analytics businesses. Higher SaaS revenues and growing Anti Financial Crime Technology business are likely to have driven Market Technology.
The Zacks Consensus Estimate for Analytics businesses revenues is pegged at $52 million, indicating an increase of 13% from the year-ago reported figure. The consensus estimate for Index revenues is pegged at $123 million, suggesting growth of 26.8% from the year-ago reported figure.
Market Technology revenues are likely to have been driven by the positive impact of the acquisition of Verafin and continued growth in surveillance solutions, growing Anti Financial Crime Technology business, higher change request revenues, higher SaaS revenues and a favorable impact of foreign exchange rates. The Zacks Consensus Estimate for Market Technology revenues is pegged at $128 million, suggesting growth of 20.7% from the prior-year reported figure.
Market Services segment revenues are likely to have been driven by higher organic revenue, higher equity derivatives, cash equities, trade management services revenues, and strong operating leverage on higher trading revenues.
The Investment Intelligence segment is expected to have benefited from higher proprietary data revenues from new sales and a favorable foreign exchange rate impact, higher licensing revenues from an increase in average AUM in ETPs linked to Nasdaq indexes, higher licensing revenues from futures trading linked to the Nasdaq-100 Index as well as growth in eVestment platform driven by new sales, strong retention, and higher average revenue per client from expanded offerings. The Zacks Consensus Estimate for Investment Intelligence segment revenues is pegged at $278 million, indicating a 16.8% increase from the year-ago reported figure.
Solid growth in the Nasdaq-listed issuer base across the U.S. and Nordic markets, organic growth, higher U.S. listings revenues, owing to expansion in the listed-issuer base, increased adoption across the breadth of Investor Relations, and newer ESG Advisory and reporting offerings are likely to have driven the Corporate Platforms segment. The Zacks Consensus Estimate for Corporate Services segment revenues is pegged at $157 million, indicating a 9% increase from the year-ago reported figure.
Q4 Volumes
Nasdaq reported solid volumes for fourth-quarter 2021. U.S. equity options volume increased 9.4% year over year to 811 million contracts. European options and futures volume increased 5.2% year over year to 18.3 million contracts.
Though revenues per contract for U.S. equity options remained flat year over year at 11 cents, the same for European options and futures dropped by a cent to 55 cents.
Under its cash equities, Nasdaq’s U.S. matched equity volume in the fourth quarter grossed 118.6 billion shares, up 2.8% from the prior-year quarter. European equity volume increased 6.4% year over year to $299 billion. Under fixed income commodities, European fixed income volume increased 26.7% to 7.6 million contracts. In the fourth quarter, there were 4,974 listed companies on Nasdaq compared with 4,051 in the year-ago period. Total listings grew 21.3% year over year to 5,415.
The consensus estimate for listing revenues is pegged at $101 million, suggesting growth of 14.8% from the year-ago reported figure.
Expenses are expected to have risen on higher organic growth, increase from the impact of acquisitions and increase from the impact of changes in foreign exchange rates.
Interest expenses are likely to have increased in the fourth quarter due to higher debt balances related to the Verafin acquisition.
Accelerated share repurchase (ASR) is anticipated to have provided an additional boost to the bottom line. Nasdaq expects to receive the remaining shares related to the ASR program in the fourth quarter.
The Zacks Consensus Estimate for earnings stands at $1.78, indicating an 11.2% increase from the prior-year reported figure.
What Our Quantitative Model States
Our proven model does not conclusively predict an earnings beat for Nasdaq this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case as you can see below.
Earnings ESP: Nasdaq has an Earnings ESP of -0.11%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Nasdaq, Inc. Price and EPS Surprise
Nasdaq, Inc. price-eps-surprise | Nasdaq, Inc. Quote
Zacks Rank: Nasdaq currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Here are some stocks from the finance sector with the perfect combination of elements to surpass estimates in their upcoming releases.
Ameriprise Financial (AMP - Free Report) has an Earnings ESP of +0.69% and a Zacks Rank #2. The Zacks Consensus Estimate for AMP’s 2022 earnings implies a year-over-year increase of 10.5%.
AMP’s earnings surpassed estimates in each of the last four quarters, the average beat being 6.4%. The Zacks Consensus Estimate for Ameriprise Financial’s 2022 earnings has moved 1.1% north in the past 30 days.
Hamilton Lane (HLNE - Free Report) has an Earnings ESP of +0.36% and a Zacks Rank #2.
Hamilton Lane’s earnings surpassed estimates in each of the last four quarters, the average beat being 36%. The Zacks Consensus Estimate for HLNE’s 2022 earnings has moved 3.3% north in the past 30 days.
SEI Investments (SEIC - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank #2. The Zacks Consensus Estimate for SEIC’s 2022 earnings implies a year-over-year increase of 8.3%.
SEI Investments' earnings surpassed estimates in three of the last four quarters and missed in one, the average beat being 1.8%. The Zacks Consensus Estimate for SEIC’s 2022 earnings has moved 2% north in the past 30 days.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.