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Is a Beat in the Cards for Nasdaq This Earnings Season?

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Nasdaq, Inc. (NDAQ - Free Report) is slated to report fourth-quarter 2024 earnings on Jan. 29, before the opening bell. The company delivered an earnings surprise in three of the last four reported quarters while missing in one.

See the Zacks Earnings Calendar to stay ahead of market-making news.

Factors to Consider

Continued organic revenue growth, new sales, an increase in Financial Crime Management Technology revenues and contributions from the Adenza acquisition are likely to have aided Nasdaq’s fourth-quarter performance.

Non-trading revenues are likely to have benefited from improved results in Capital Access Platforms, Financial Technology and Market Services businesses.

Price increases, new sales to existing clients and new customer acquisitions, particularly small and medium-sized businesses are likely to have aided the Financial Crime Management Technology business. The inclusion of revenues from Calypso associated with the acquisition of Adenza and subscription revenues from trade management services and market technology is likely to have aided the Capital Markets Technology business.
The growth is likely to be partially offset by lower market technology professional services revenues due to large project delivery in the comparative period. We expect Capital Markets Technology revenues to be $272.6 million.

Higher AUM in exchange-traded products linked to Nasdaq indices, growth in trading volume on futures contracts linked to the Nasdaq-100 Index, higher Data Link sales as well as growth in eVestment product offerings are expected to have aided performance at the Capital Access Platforms division.

The Zacks Consensus Estimate for revenues is pegged at $1.23 billion, indicating a 10% increase from the prior-year reported figure.

An increase in compensation and benefits, professional & contract services expenses, as well as technology and communication infrastructure, general and administrative expenses, marketing and advertising, depreciation and amortization and restructuring charges are likely to have increased total expenses for the to-be-reported quarter. We expect non-GAAP operating expenses to increase 13.8% year over year.

Nevertheless, share buybacks in the to-be-reported quarter are anticipated to have provided a boost to the bottom line.

The Zacks Consensus Estimate for earnings is pegged at 75 cents per share, indicating a 4.1% decrease from the prior-year reported figure.

Q4 Volumes

Nasdaq reported mixed volumes for the fourth quarter of 2024. The U.S. equity options volume increased 18% year over year to 921 million contracts. European options and futures volume decreased 16.4% year over year to 14.2 million contracts.

Revenues per contract for the U.S. equity options remain unchanged year over year to 12 cents, while the same for European options and futures increased 24% to 57 cents.

Under its cash equities, Nasdaq’s U.S. matched equity volume in the third quarter grossed 125.2 billion shares, up 10.5% from the prior-year quarter’s level. European equity volume decreased 1% year over year to $198 billion.
In the fourth quarter, there were 4,481 listed companies on the Nasdaq compared with 4,662 in the year-ago period. Total listings dropped 0.2% year over year to 5,249.

We expect data and listing services revenues to increase 1.4% to $191.6 million in the to-be-reported quarter.

What Our Quantitative Model States

Our proven model predicts an earnings beat for Nasdaq 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 +0.21% at present. 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 and EPS Surprise

Nasdaq, Inc. price-eps-surprise | Nasdaq, Inc. Quote

Zacks Rank: Nasdaq currently carries a Zacks Rank #2.

Other Stocks to Consider

CME Group Inc. (CME - Free Report) has an Earnings ESP of +0.05% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $2.44 per share, indicating a year-over-year increase of 2.9%.

CME’s earnings beat estimates in each of the last four quarters.

The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +4.69% and carries a Zacks Rank of 3 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $6.20 per share, implying an increase of 6.5% from the year-ago reported figure.

ALL’s earnings beat estimates in each of the last four reported quarters.

Palomar Holdings, Inc. (PLMR - Free Report) has an Earnings ESP of +0.27% and a Zacks Rank #2 at present. The Zacks Consensus Estimate for fourth-quarter 2024 earnings is pegged at $1.24, indicating a year-over-year increase of 11.7%.

PLMR’s earnings beat estimates in each of the last four reported quarters.

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