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Here's Why You Should Hold Nasdaq (NDAQ) Stock Right Now
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Nasdaq Inc. (NDAQ - Free Report) has been in investors’ good books owing to impressive organic growth, ramping up of on-trading revenue base and strategic buyouts to capitalize on growing market opportunities.
Zacks Rank & Price Performance
Nasdaq currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 15.5% compared with the industry’s growth of 42.2%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for Nasdaq’s 2025 earnings per share is pegged at $3.08, indicating a year-over-year increase of 12.5%. The consensus estimate for revenues is $4.92 billion, implying an increase of 6.6%.
Earnings Surprise History
Nasdaq has a decent earnings surprise history. It beat estimates in each of the last four quarters, with the average being 6.05%.
Northbound Estimate Revision
The Zacks Consensus Estimate for NDAQ’s 2024 and 2025 earnings has moved 0.7% and 0.3% north, respectively, in the past seven days. This should instill investors' confidence in the stock.
Return on Equity
The company’s return on equity was 19.2% in the trailing 12 months, which is better than the industry average of 13%.
Business Tailwinds
Nasdaq remains focused on generating more revenues from high-growth Market Technology and Investment Intelligence segments. It is also redirecting R&D spending toward higher-growth products. The company is expanding its Anti-Financial Crime clientele as well as making innovations.
Nasdaq has an impressive inorganic growth story. The Adenza Group buyout will boost its Marketplace Technology and Anti-Financial Crime solutions. The transaction also strengthens its offerings across a wider spectrum of regulatory technology, compliance and risk management solutions.
NDAQ has been investing in proprietary data and migrating markets and SaaS solutions to capitalize on the immense opportunity offered by the cryptocurrency markets.
Nasdaq noted that the anti-fin crime space has a total addressable market of $12.5 billion and is expected to witness a CAGR of 17% through 2024. Thus, the strategic acquisition of Verafin in February 2021 was targeted to consolidate the insurer's established reg tech leadership to create a global SaaS leader. NDAQ aims 40-50% SaaS revenues, as a percentage of total revenues by 2025.
The company estimates strong growth from its index and analytics businesses, followed by moderate growth in its exchange data products across U.S. and Nordic equities.
Due to a change in corporate structure, NDAQ estimates to incur $115 million to $145 million in pretax charges, of which about 40% will be non-cash charges. Nonetheless, this will help unlock revenue synergies. The company estimates benefits in the form of combined annual run rate operating efficiencies and revenue synergies of at least $30 million by 2025.
Stocks to Consider
Some better-ranked stocks from the finance sector are Coinbase Global, Inc. (COIN - Free Report) , Cboe Global Markets, Inc. (CBOE - Free Report) and Enact Holdings, Inc. (ACT - Free Report) . While Coinbase Global sports a Zacks Rank #1 (Strong Buy), Cboe Global and Enact Holdings carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coinbase Global’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 377.57%. In the past year, COIN has rallied 333.7%.
The Zacks Consensus Estimate for COIN’s 2024 earnings per share is pegged at $1.01, indicating a year-over-year increase of 172.97%.
Cboe Global’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 4.14%. In the past year, CBOE has gained 52.7%.
The Zacks Consensus Estimate for CBOE’s 2024 and 2025 earnings indicates 6.4% and 6.2% year-over-year growth, respectively.
Enact Holdings delivered a four-quarter average earnings surprise of 24.59%. In a year, ACT’s shares have gained 22.1%. In the past year, ACT has jumped 32.9%.
The Zacks Consensus Estimate for ACT’s 2024 and 2025 earnings has moved up 0.7% and 1.5%, respectively, in the past seven days.
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Here's Why You Should Hold Nasdaq (NDAQ) Stock Right Now
Nasdaq Inc. (NDAQ - Free Report) has been in investors’ good books owing to impressive organic growth, ramping up of on-trading revenue base and strategic buyouts to capitalize on growing market opportunities.
Zacks Rank & Price Performance
Nasdaq currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 15.5% compared with the industry’s growth of 42.2%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for Nasdaq’s 2025 earnings per share is pegged at $3.08, indicating a year-over-year increase of 12.5%. The consensus estimate for revenues is $4.92 billion, implying an increase of 6.6%.
Earnings Surprise History
Nasdaq has a decent earnings surprise history. It beat estimates in each of the last four quarters, with the average being 6.05%.
Northbound Estimate Revision
The Zacks Consensus Estimate for NDAQ’s 2024 and 2025 earnings has moved 0.7% and 0.3% north, respectively, in the past seven days. This should instill investors' confidence in the stock.
Return on Equity
The company’s return on equity was 19.2% in the trailing 12 months, which is better than the industry average of 13%.
Business Tailwinds
Nasdaq remains focused on generating more revenues from high-growth Market Technology and Investment Intelligence segments. It is also redirecting R&D spending toward higher-growth products. The company is expanding its Anti-Financial Crime clientele as well as making innovations.
Nasdaq has an impressive inorganic growth story. The Adenza Group buyout will boost its Marketplace Technology and Anti-Financial Crime solutions. The transaction also strengthens its offerings across a wider spectrum of regulatory technology, compliance and risk management solutions.
NDAQ has been investing in proprietary data and migrating markets and SaaS solutions to capitalize on the immense opportunity offered by the cryptocurrency markets.
Nasdaq noted that the anti-fin crime space has a total addressable market of $12.5 billion and is expected to witness a CAGR of 17% through 2024. Thus, the strategic acquisition of Verafin in February 2021 was targeted to consolidate the insurer's established reg tech leadership to create a global SaaS leader. NDAQ aims 40-50% SaaS revenues, as a percentage of total revenues by 2025.
The company estimates strong growth from its index and analytics businesses, followed by moderate growth in its exchange data products across U.S. and Nordic equities.
Due to a change in corporate structure, NDAQ estimates to incur $115 million to $145 million in pretax charges, of which about 40% will be non-cash charges. Nonetheless, this will help unlock revenue synergies. The company estimates benefits in the form of combined annual run rate operating efficiencies and revenue synergies of at least $30 million by 2025.
Stocks to Consider
Some better-ranked stocks from the finance sector are Coinbase Global, Inc. (COIN - Free Report) , Cboe Global Markets, Inc. (CBOE - Free Report) and Enact Holdings, Inc. (ACT - Free Report) . While Coinbase Global sports a Zacks Rank #1 (Strong Buy), Cboe Global and Enact Holdings carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coinbase Global’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 377.57%. In the past year, COIN has rallied 333.7%.
The Zacks Consensus Estimate for COIN’s 2024 earnings per share is pegged at $1.01, indicating a year-over-year increase of 172.97%.
Cboe Global’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, the average beat being 4.14%. In the past year, CBOE has gained 52.7%.
The Zacks Consensus Estimate for CBOE’s 2024 and 2025 earnings indicates 6.4% and 6.2% year-over-year growth, respectively.
Enact Holdings delivered a four-quarter average earnings surprise of 24.59%. In a year, ACT’s shares have gained 22.1%. In the past year, ACT has jumped 32.9%.
The Zacks Consensus Estimate for ACT’s 2024 and 2025 earnings has moved up 0.7% and 1.5%, respectively, in the past seven days.