Nasdaq Inc

Nasdaq Inc. (NASDAQ: NDAQ) is a technological corporation with a global presence. Market Technology, Investment Intelligence, Corporate Platforms, and Market Services are the four business sectors that the company manages, runs, and offers goods and services for.

Latest News

• Quarterly Dividend:On April 20, 2022, the company declared a quarterly dividend of USD 0.60 per common share (YoY growth of 11%), payable on June 24, 2022, to shareholders of record on June 10, 2022.

Q1FY22 Result Highlights

• Growth in Topline: NDAQ reported a growth of 4.82% YoY in its total revenues to USD 892 million in Q1FY22 (ended March 31, 2022) from USD 851 million in FY21, driven by 15% growth in Solutions Segment revenues partially offset by 6% decline in Market Services revenues.
• Slight Decrease in Bottomline:The company recorded a decrease in net income (attributable to its shareholders) to USD 284 million in Q1FY22 vs. USD 298 million in Q1FY21.
• Progress in ARR:NDAQ reported an annualized recurring revenue of USD 1.91 billion in Q1FY22 compared to USD 1.76 billion in Q1FY21.

Key Risk

• Dependence on Trading and Clearing Volumes: Because the volume or value of securities traded and cleared on the company's markets accounts for a significant portion of its revenues, a general fall in trading and clearing volumes or values is likely to lower revenues. The company's operating results may suffer if it cannot counteract declining volumes or values through pricing changes.
• Technological Risk: The company, which provides technology to the Unlisted Trading Privileges (UTP) Operating Committee, has taken steps to strengthen the system's resiliency. However, subsequent processor system outages or failures while operating the systems could jeopardize the company's business, reputation, and financial standing.

Outlook

As of April 20, 2022, NDAQ expects non-GAAP operating costs to be between USD 1,700 and 1,760 million. It also forecasts a non-GAAP tax rate of between 24.0 percent and 26.0 percent in FY22.

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation

NDAQ's stock price has fallen 30.65% in the past six months and is currently leaning towards the lower band of its 52-week range of USD 144.21 to USD 214.96. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 180.89.

Considering the correction in the stock price, improved margins, healthy balance sheet, positive outlook, associated risks, and current valuation. We recommend a "Buy" rating on the stock at the closing price of USD 146.45, down 0.18% as of May 10, 2022, at 12:05 PM PDT.

1-year technical Price Chart (as of 10^th May 2022, at 12:05 PM PDT). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary

* Current price as of May 10, 2022, at 12:05 PM PDT.

 Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decisions should be made depending on the investors' appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.