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Nasdaq (NDAQ)
NASDAQ:NDAQ
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Nasdaq
(NASDAQ:NDAQ)75Outperform
Positive Factors
Business Transformation
Transformation of the business to a financial technology and services provider positions NDAQ to penetrate large and fast growing end markets.
Revenue Growth
Solutions businesses comprise over 80% of firmwide revenues growing at 8-11% revenue CAGR, yet is only 10% penetrated against a large $79b TAM and $31b SAM.
Negative Factors
Cyclical Headwinds
Cyclical headwinds such as IPO activity remain.
Nasdaq (NDAQ) vs. S&P 500 (SPY)
Market Cap
$47.61B
Dividend Yield1.14%
Average Volume (3M)2.66M
Price to Earnings (P/E)42.9
Beta (1Y)0.63
Revenue Growth21.96%
EPS Growth-8.37%
CountryUS
Employees8,525
SectorFinancial
Sector Strength93
IndustryCapital Markets
Share Statistics
EPS (TTM)1.93
Shares Outstanding575,145,300
10 Day Avg. Volume2,412,105
30 Day Avg. Volume2,657,098
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)6.43
Price to Cash Flow (P/CF)16.90
P/FCF Ratio16.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$89.00Price Target Upside13.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Nasdaq Business Overview & Revenue Model
Company DescriptionNasdaq, Inc. (NDAQ) is a global technology company serving the capital markets and other industries. It operates one of the world's largest stock exchanges, providing a platform for buying and selling securities. Nasdaq offers a diverse range of products and services, including trading, clearing, exchange technology, listing services, market data, and financial technology solutions. The company is known for its electronic trading systems and is a leader in providing technology solutions to other stock exchanges and financial institutions worldwide.
How the Company Makes MoneyNasdaq makes money through multiple revenue streams. Its primary source of revenue comes from transaction fees charged for trading on its exchange platforms. Additionally, Nasdaq generates income from listing fees paid by companies to list their stocks on its exchanges. The company also earns revenue by providing market data and analytics services to financial institutions and investors. Another significant source of revenue is its technology solutions, where Nasdaq licenses its trading and clearing technology to other exchanges and financial entities. Furthermore, Nasdaq has diversified into offering corporate solutions, such as investor relations and governance services, to listed companies. Strategic partnerships and acquisitions in fintech and data analytics have also bolstered its revenue streams.
Nasdaq Financial Statement Overview
Summary
Nasdaq showcases a solid financial performance with strong revenue and profit growth, efficient operational management, and a stable balance sheet. The company has effectively managed its debt levels and generated substantial cash flows, reflecting financial health and growth potential. While there is a slight decline in net profit margin, the overall financial trajectory remains positive with opportunities for future expansion.Income Statement
Nasdaq has demonstrated strong revenue growth with a 22.04% increase from 2023 to 2024 and consistent increases in gross profit margins, reaching 80.59% in 2024. The net profit margin remains healthy at 15.10%, albeit lower than the previous year. The company exhibits a robust EBIT margin of 24.30% and a solid EBITDA margin of 22.30%, indicating efficient operational management. Overall, the income statement shows a positive growth trajectory and strong profitability.85
Very Positive
Balance Sheet
Nasdaq's balance sheet reflects a moderate debt-to-equity ratio of 0.88, suggesting a balanced capital structure. The return on equity stands at 9.98%, indicating effective use of equity capital, although there is room for improvement. The equity ratio is at 36.81%, showcasing a stable financial position with a significant portion of assets financed by equity. Despite the increase in total debt, the company's equity growth has kept leverage stable.75
Positive
Cash Flow
Nasdaq's cash flow performance is strong, with a significant free cash flow growth rate of 18.14% from 2023 to 2024. The operating cash flow to net income ratio is well above 1, at 1.81, demonstrating efficient cash generation from operations. The free cash flow to net income ratio is also robust at 1.63, highlighting the company's ability to generate free cash flow relative to net income, supporting future investments and debt repayments.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 7.02B | 7.40B | 6.06B | 6.23B | 5.89B | 5.63B | Gross Profit |
| 4.01B | 5.96B | 3.90B | 2.58B | 2.48B | 2.12B | EBIT |
| 1.73B | 1.80B | 1.58B | 1.56B | 1.44B | 1.23B | EBITDA |
| 2.51B | 1.65B | 2.00B | 1.95B | 1.90B | 1.55B | Net Income Common Stockholders |
| 959.00M | 1.12B | 1.06B | 1.13B | 1.19B | 933.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 623.00M | 623.00M | 473.00M | 683.00M | 601.00M | 2.94B | Total Assets |
| 30.39B | 30.39B | 32.29B | 20.87B | 20.11B | 17.98B | Total Debt |
| 9.87B | 9.87B | 10.87B | 5.85B | 6.22B | 5.93B | Net Debt |
| 9.24B | 9.24B | 10.42B | 5.35B | 5.82B | 3.19B | Total Liabilities |
| 19.20B | 19.20B | 21.47B | 14.70B | 13.71B | 11.54B | Stockholders Equity |
| 11.19B | 11.19B | 10.82B | 6.15B | 6.39B | 6.43B |
| Cash Flow | Free Cash Flow | ||||
| 1.46B | 1.82B | 1.54B | 1.55B | 920.00M | 1.06B | Operating Cash Flow |
| 1.65B | 2.02B | 1.70B | 1.71B | 1.08B | 1.25B | Investing Cash Flow |
| -5.78B | -953.00M | -5.99B | 49.00M | -2.65B | -231.00M | Financing Cash Flow |
| -1.34B | -2.56B | 4.22B | 1.04B | 1.42B | 1.38B |
Nasdaq Technical Analysis
Neutral
78.76
Price Trends
79.83
Negative
78.67
Positive
72.10
Positive
Market Momentum
0.06
Positive
42.21
Neutral
62.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NDAQ, the sentiment is Neutral. The current price of 78.76 is below the 20-day moving average (MA) of 81.32, below the 50-day MA of 79.83, and above the 200-day MA of 72.10, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 42.21 is Neutral, neither overbought nor oversold. The STOCH value of 62.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NDAQ.
Nasdaq Risk Analysis
Nasdaq disclosed 42 risk factors in its most recent earnings report. Nasdaq reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nasdaq Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $90.80B | 26.05 | 13.31% | 4.05% | 9.88% | 9.18% | |
79 Outperform | $22.07B | 29.22 | 17.87% | 1.16% | 8.51% | 1.13% | |
77 Outperform | $99.53B | 36.23 | 9.94% | 1.04% | 15.32% | 14.02% | |
75 Outperform | $47.61B | 42.92 | 9.98% | 1.14% | 21.96% | -8.37% | |
73 Outperform | $7.27B | 26.49 | 19.74% | 1.54% | 9.06% | 6.10% | |
70 Outperform | $45.85B | 42.04 | -117.99% | 1.12% | 12.94% | -2.54% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
NDAQ
Nasdaq
78.76
22.62
40.29%
CBOE
Cboe Global Markets
211.32
23.36
12.43%
CME
CME Group
251.98
41.88
19.93%
ICE
Intercontinental Exchange
169.85
32.13
23.33%
MKTX
Marketaxess Holdings
197.89
-10.60
-5.08%
MSCI
MSCI
567.62
23.79
4.37%
Nasdaq Earnings Call Summary
Earnings Call Date: Jan 29, 2025 | % Change Since: -2.99% | Next Earnings Date: Apr 16, 2025
Earnings Call Sentiment Positive
Nasdaq demonstrated strong overall financial and operational performance in 2024 with significant revenue growth across key segments, successful client acquisition, and effective deleveraging. However, challenges in corporate solutions and potential regulatory changes pose some risks.Highlights
Strong Financial Performance
Nasdaq reported a net revenue of $4.7 billion for 2024, a 9% increase from 2023. The fourth quarter saw net revenue growth of 10% year-over-year to $1.2 billion.
Growth in Solutions Revenue
Solutions revenue grew 10% for the full year and 9% for the fourth quarter. ARR ended the year at $2.8 billion, a 7.5% increase year-over-year.
Index Revenue Growth
The Index Franchise delivered 31% revenue growth for the year, ending with record AUM. The fourth quarter saw a 29% increase in index revenue.
Expansion in Financial Technology Division
The division delivered 12% ARR growth overall, with notable 23% growth in financial crime management technology.
Operational Milestones
Nasdaq achieved 263 new client signings, 424 upsells, and 11 cross-sells in 2024, highlighting successful client penetration and cross-selling strategies.
Deleveraging Goals Achieved
Nasdaq reduced its gross leverage ratio from 4.3 times to 3.6 times by the end of 2024, ahead of schedule.
Lowlights
Challenges in Corporate Solutions
The Corporate Solutions business faced challenges due to a slower issuance environment and a high number of delistings.
Impact of Professional Services Revenue
Professional services revenue was lower, impacting overall revenue growth, particularly in financial technology.
Regulatory Environment Concerns
Potential deregulation under the new U.S. administration could impact demand for regulatory technology offerings, creating uncertainty.
Company Guidance
During the Nasdaq Fourth Quarter and Full Year 2024 Results Conference Call, significant guidance and metrics were disclosed. For 2024, Nasdaq reported a 9% increase in net revenues, reaching $4.7 billion, with solutions revenue up 10%. The annualized recurring revenue (ARR) ended at $2.8 billion, marking a 7.5% year-over-year increase. The company's Financial Technology Division experienced a notable ARR growth of 12%, driven by Financial Crime Management's 23% growth, Regulatory Technology's 11% growth, and Capital Markets Technology's 9% growth. Additionally, Nasdaq achieved record full-year revenue in Market Services, boosted by higher volumes in U.S. equity derivatives and cash equities. Looking forward to 2025, Nasdaq anticipates maintaining its medium-term growth outlook, with expectations for the Capital Access Platforms Division to achieve 5-8% revenue growth, while Index revenue is projected to exceed mid-to-high single digits. The company also plans to implement an expanded efficiency program targeting $140 million in cost reductions by the end of 2025, with operating expenses expected to grow 6% at the midpoint.Nasdaq Corporate Events
Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Nasdaq Reports Strong 2024 Financial Performance and Growth
Positive
Jan 29, 2025
On January 29, 2025, Nasdaq reported its financial results for the fourth quarter and full year of 2024, highlighting a year of strong performance and strategic execution. The company achieved a 19% increase in net revenues to $4.6 billion, driven by a 25% rise in Solutions revenue. Financial Technology revenue grew by 10%, and Index revenue saw a remarkable 29% increase. Despite a 7% decline in GAAP diluted earnings per share for the year, the fourth quarter showed a significant recovery with a 72% increase. The company returned $138 million to shareholders through dividends and repurchased $181 million of senior unsecured notes in the fourth quarter. Nasdaq’s strategic initiatives, such as the integration of AxiomSL and Calypso, have positioned it well for future growth, focusing on cross-selling opportunities and expanding client relationships.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.