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Is a Beat in Store for Nasdaq (NDAQ) This Earnings Season?
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Nasdaq, Inc. (NDAQ - Free Report) is slated to report third-quarter 2023 earnings on Oct 18, before the opening bell. The company delivered an earnings surprise in each of the last two reported quarters of 2023.
Factors to Consider
Solid organic revenue growth, strong performance at Market Platforms businesses, data and listing services revenues and contributions from the Adenza acquisition are likely to have aided Nasdaq’s third-quarter performance.
Improved performance at Market Technology, Market Data and Analytics businesses is expected to have benefited non-trading revenues.
Data revenues are likely to have benefited from growth in recurring data revenues across its international footprint.
Improved trade management services and market technology are likely to have aided the
Marketplace Technology business. We expect Marketplace Technology revenues to increase 4.8% to $147.8 million.
Organic growth initiatives are likely to have aided Anti Financial Crime revenues. Strong demand for trade surveillance and crypto market surveillance solutions are likely to have driven increased subscriptions from new and existing clients, benefiting surveillance solutions revenues. We estimate Anti Financial Crime revenues to increase 16% to $89.3 million. The Zacks Consensus Estimate is pegged at $92 million.
Expenses are likely to have increased owing to the development and diversification of its business, compensation and benefits, merger and strategic initiatives, restructuring charges, general, administrative and other expenses. These are expected to have weighed on margin expansion.
Due to the timing of expected expenses, the company expects a greater sequential increase in expenses in the third quarter. We expect the metric to increase 8.9% to $453.9 million.
The continued share buyback is anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for earnings stands at 67 cents, indicating a 1.5% decrease from the prior-year reported figure.
Q3 Volumes
Nasdaq reported soft volumes for third-quarter 2023. U.S. equity options volume increased 9.4% year over year to 790 million contracts. European options and futures volume decreased 8.5% year over year to 16.1 million contracts.
Revenues per contract for U.S. equity options remained flat year over year year at 12 cents, while the same for European options and futures decreased 2.3% to 43 cents.
Under its cash equities, Nasdaq’s U.S. matched equity volume in the third quarter grossed 106.7 billion shares, down 11% from the prior-year quarter. European equity volume decreased 15.2% year over year to $168 billion.
In the third quarter, there were 4,953 listed companies on Nasdaq compared with 4,752 in the year-ago period. Total listings grew 1.3% year over year to 5,322.
We expect listing revenues to increase 0.8% to $181.5 million in the to-be-reported quarter.
What Our Quantitative Model States
Our proven model predicts Nasdaq to beat estimates this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: Nasdaq has an Earnings ESP of +1.09%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Cboe Global Markets (CBOE - Free Report) has an Earnings ESP of +1.62% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.82, indicating an increase of 4.6% from the year-ago reported figure.
CBOE’s earnings beat estimates in all the last four reported quarters.
CME Group (CME - Free Report) has an Earnings ESP of +0.11% and a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $2.21, suggesting an increase of 11.6% from the figure reported in the year-ago quarter.
CME’s earnings beat estimates in all the last four reported quarters.
Arch Capital Group (ACGL - Free Report) has an Earnings ESP of +1.13% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2023 earnings stands at $1.48, indicating an increase of 428.6% from the reported figure in the year-ago quarter.
ACGL’s earnings beat estimates in the last four reported quarters.
Image: Shutterstock
Is a Beat in Store for Nasdaq (NDAQ) This Earnings Season?
Nasdaq, Inc. (NDAQ - Free Report) is slated to report third-quarter 2023 earnings on Oct 18, before the opening bell. The company delivered an earnings surprise in each of the last two reported quarters of 2023.
Factors to Consider
Solid organic revenue growth, strong performance at Market Platforms businesses, data and listing services revenues and contributions from the Adenza acquisition are likely to have aided Nasdaq’s third-quarter performance.
Improved performance at Market Technology, Market Data and Analytics businesses is expected to have benefited non-trading revenues.
Data revenues are likely to have benefited from growth in recurring data revenues across its international footprint.
Improved trade management services and market technology are likely to have aided the
Marketplace Technology business. We expect Marketplace Technology revenues to increase 4.8% to $147.8 million.
Organic growth initiatives are likely to have aided Anti Financial Crime revenues. Strong demand for trade surveillance and crypto market surveillance solutions are likely to have driven increased subscriptions from new and existing clients, benefiting surveillance solutions revenues. We estimate Anti Financial Crime revenues to increase 16% to $89.3 million. The Zacks Consensus Estimate is pegged at $92 million.
Expenses are likely to have increased owing to the development and diversification of its business, compensation and benefits, merger and strategic initiatives, restructuring charges, general, administrative and other expenses. These are expected to have weighed on margin expansion.
Due to the timing of expected expenses, the company expects a greater sequential increase in expenses in the third quarter. We expect the metric to increase 8.9% to $453.9 million.
The continued share buyback is anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for earnings stands at 67 cents, indicating a 1.5% decrease from the prior-year reported figure.
Q3 Volumes
Nasdaq reported soft volumes for third-quarter 2023. U.S. equity options volume increased 9.4% year over year to 790 million contracts. European options and futures volume decreased 8.5% year over year to 16.1 million contracts.
Revenues per contract for U.S. equity options remained flat year over year year at 12 cents, while the same for European options and futures decreased 2.3% to 43 cents.
Under its cash equities, Nasdaq’s U.S. matched equity volume in the third quarter grossed 106.7 billion shares, down 11% from the prior-year quarter. European equity volume decreased 15.2% year over year to $168 billion.
In the third quarter, there were 4,953 listed companies on Nasdaq compared with 4,752 in the year-ago period. Total listings grew 1.3% year over year to 5,322.
We expect listing revenues to increase 0.8% to $181.5 million in the to-be-reported quarter.
What Our Quantitative Model States
Our proven model predicts Nasdaq to beat estimates this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: Nasdaq has an Earnings ESP of +1.09%. 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.
Other Stocks to Consider
Cboe Global Markets (CBOE - Free Report) has an Earnings ESP of +1.62% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $1.82, indicating an increase of 4.6% from the year-ago reported figure.
CBOE’s earnings beat estimates in all the last four reported quarters.
CME Group (CME - Free Report) has an Earnings ESP of +0.11% and a Zacks Rank #2. The Zacks Consensus Estimate for third-quarter 2023 earnings is pegged at $2.21, suggesting an increase of 11.6% from the figure reported in the year-ago quarter.
CME’s earnings beat estimates in all the last four reported quarters.
Arch Capital Group (ACGL - Free Report) has an Earnings ESP of +1.13% and a Zacks Rank of 2. The Zacks Consensus Estimate for third-quarter 2023 earnings stands at $1.48, indicating an increase of 428.6% from the reported figure in the year-ago quarter.
ACGL’s earnings beat estimates in the last four reported quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.