Nasdaq (NDAQ) AI Stock Analysis

• Market Cap: $41.14B
• Dividend Yield: 1.34%
• Average Volume (3M): 3.77M
• Price to Earnings (P/E): 37.1
• Beta (1Y): 0.75
• Revenue Growth: 21.96%
• EPS Growth: -8.37%
• Country: US
• Employees: 9,162
• Sector: Financial
• Sector Strength: 83
• Industry: Financial - Data & Stock Exchanges
• EPS (TTM): 1.93
• Shares Outstanding: 575,145,300
• 10 Day Avg. Volume: 5,083,268
• 30 Day Avg. Volume: 3,769,793
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 5.87
• Price to Cash Flow (P/CF): 15.40
• P/FCF Ratio: 15.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $83.25
• Price Target Upside: 14.39% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

Nasdaq's strong financial performance and positive earnings call guidance highlight its growth and operational efficiency. However, current technical indicators suggest potential bearish trends, and the stock's valuation appears high. These mixed factors result in a moderate overall score.

Positive Factors

Business Transformation

The transformation of the business to a financial technology and services provider positions NDAQ to penetrate large and fast growing end markets.

Capital Markets Rebound

NDAQ is seen as an underappreciated beneficiary of a capital markets rebound, with slower revenue streams expected to re-accelerate as the IPO pipeline improves.

Revenue Growth

Verafin, NDAQ's anti-financial crime management technology business, is the fastest growing revenue stream today at over 20% annually.

Negative Factors

Economic Uncertainty

Potential headwinds are expected across several businesses, including data & listings, workflow and insights, and market technology, due to current market and economic uncertainty.

Market Conditions

The market pullback will reset index AUM levels lower, which could negatively impact the company's performance.

Shareholder Actions

The expiration of Thoma Bravo’s 43M shares lockup could present additional pressure on the stock.

Nasdaq Business Overview & Revenue Model

Company Description

Nasdaq, Inc. operates as a technology company that serves capital markets and other industries worldwide. The Market Technology segment includes anti financial crime technology business, which offers Nasdaq Trade Surveillance, a SaaS solution for brokers and other market participants to assist them in complying with market rules, regulations, and internal market surveillance policies; Nasdaq Automated Investigator, a cloud-deployed anti-money laundering tool; and Verafin, a SaaS technology provider of anti-financial crime management solutions. This segment also handles assets, such as cash equities, equity derivatives, currencies, interest-bearing securities, commodities, energy products, and digital currencies. The Investment Intelligence segment sells and distributes historical and real-time market data; develops and licenses Nasdaq-branded indexes and financial products; and provides investment insights and workflow solutions. The Corporate Platforms segment operates listing platforms; and offers investor relations intelligence and governance solutions. As of December 31, 2021, it had 4,178 companies listed securities on The Nasdaq Stock Market, including 1,632 listings on The Nasdaq Global Select Market; 1,169 on The Nasdaq Global Market; and 1,377 on The Nasdaq Capital Market. The Market Services segment includes equity derivative trading and clearing, cash equity trading, fixed income and commodities trading and clearing, and trade management service businesses. This segment operates various exchanges and other marketplace facilities across various asset classes, which include derivatives, commodities, cash equity, debt, structured products, and exchange traded products; and provides broker, clearing, settlement, and central depository services. The company was formerly known as The NASDAQ OMX Group, Inc. and changed its name to Nasdaq, Inc. in September 2015. Nasdaq, Inc. was founded in 1971 and is headquartered in New York, New York.

How the Company Makes Money

Nasdaq 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 demonstrates strong revenue and profit growth with a robust EBIT margin and efficient cash generation, indicating efficient operational management and financial health. However, the net profit margin saw a slight decline.

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.

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.

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.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.40B	6.06B	6.23B	5.89B	5.63B
	Gross Profit
5.96B	3.90B	2.58B	2.48B	2.12B
	EBIT
1.80B	1.58B	1.56B	1.44B	1.23B
	EBITDA
2.46B	2.00B	1.95B	1.90B	1.55B
	Net Income Common Stockholders
1.12B	1.06B	1.13B	1.19B	933.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
776.00M	473.00M	683.00M	601.00M	2.94B
	Total Assets
30.39B	32.29B	20.87B	20.11B	17.98B
	Total Debt
9.87B	10.87B	5.85B	6.22B	5.93B
	Net Debt
9.28B	10.42B	5.35B	5.82B	3.19B
	Total Liabilities
19.20B	21.47B	14.70B	13.71B	11.54B
	Stockholders Equity
11.19B	10.82B	6.15B	6.39B	6.43B
Cash Flow		Free Cash Flow
1.73B	1.54B	1.55B	920.00M	1.06B
	Operating Cash Flow
1.94B	1.70B	1.71B	1.08B	1.25B
	Investing Cash Flow
-953.00M	-5.99B	49.00M	-2.65B	-231.00M
	Financing Cash Flow
-2.56B	4.22B	1.04B	1.42B	1.38B

Nasdaq Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 72.78
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 72.78 is below the 20-day moving average (MA) of 74.06, below the 50-day MA of 77.00, and below the 200-day MA of 73.98, indicating a bearish trend. The MACD of -1.72 indicates Positive momentum. The RSI at 47.27 is Neutral, neither overbought nor oversold. The STOCH value of 49.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NDAQ.

Nasdaq Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CME	80 Outperform	$95.03B	27.26	13.26%	4.01%	9.88%	9.18%
CBOE	79 Outperform	$22.52B	29.82	18.42%	1.13%	8.51%	1.13%
ICE	77 Outperform	$89.57B	32.61	10.32%	1.17%	15.32%	14.02%
MKTX	73 Outperform	$8.38B	30.56	20.45%	1.34%	9.06%	6.10%
MSCI	73 Outperform	$42.04B	38.56	-117.99%	1.22%	12.94%	-2.54%
NDAQ	73 Outperform	$41.14B	37.09	10.15%	1.34%	21.96%	-8.37%
Sector *	63 Neutral	$13.51B	9.48	9.36%	4.87%	16.09%	-8.30%

Nasdaq Corporate Events

Nasdaq Extends Executive Contracts Through 2030

On March 10 and 11, 2025, Nasdaq, Inc. announced new employment agreements with key executives Adena T. Friedman, Tal Cohen, and Bradley J. Peterson, extending their roles through 2030 and 2028, respectively. These agreements include substantial compensation packages, equity awards, and severance benefits, reflecting Nasdaq’s commitment to retaining top leadership and ensuring stability in its executive team. The agreements also outline specific terms for termination and retirement, emphasizing continuity in leadership amid potential changes in control, which could impact Nasdaq’s strategic direction and reassure stakeholders of consistent governance.

Nasdaq Reports Strong 2024 Financial Performance and Growth

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.