Nasdaq, Inc.

NDAQ Details

Nasdaq, Inc. (NASDAQ: NDAQ) is a multinational technology company focusing on capital markets and other sectors. Clients can confidently optimise and execute their business visions because of its complete range of data, analytics, software, and services. The four business segments it controls, operate and delivers products and services are Market Services, Corporate Platforms, Investment Intelligence, and Market Technology.

Latest News:

• Acquisition of Metrio: Nasdaq, Inc. stated on June 02, 2022, that it has agreed to buy Metrio, a privately held supplier of ESG data collecting, analytics, and reporting services in Montreal. Nasdaq intends to incorporate Metrio's software-as-a-service (SaaS) technology into its ESG offerings. It is anticipated that it will increase businesses' ability to manage and extract value from their data, allowing them to make better decisions.
• Increase in Quarterly Dividend and Seeks Approval for Stock Split: On April 20, 2022, the company declared a quarterly dividend of USD 0.60 per share. The dividend is payable on June 24, 2022, and the company has begun seeking necessary shareholder and SEC approvals to allow the company to execute a 3-for-1 stock split.

Q1 FY23 Results:

• Increase in Net Revenue: The net revenue for Q1 FY22 was USD 892 million, up by USD 41 million, or 5%, from USD 851 million in Q1 FY21. Net revenues increased by USD 51 million, or 6%, due to organic growth, offset by a USD 4 million rise due to the net impact of acquisitions and divestitures.
  

• Building a Record of Strong Financial Performance:

(Source: Company Filings) 

• Slight Decrease in Net Income: The company's net was USD 284 million in Q1 FY22 from USD 298 million in Q1 FY21 due to increased interest expenses and a significant decrease in net income from unconsolidated income investees.
• Cash Position and Free Cash Flow: The company's cash and cash equivalents were USD 486 million as of March 31, 2022, compared to USD 393 million as of December 31, 2021. In addition, the free cash flow data up until this point is displayed in the excerpt below.

(Source: Company Filings) 

2022 Expense and Tax Guidance Update:

• The company's non-GAAP operating expense projection for 2022 has been reduced to a range of USD 1,700 to USD 1,760 million. Nasdaq forecasts its non-GAAP tax rate in 2022 to be between 24.0 and 26.0%.

Key Risks:

• Technology and Development Risk: The integrity and performance of the technological, computer and communications systems that support them are critical to their success. If new systems fail to perform as expected, or old systems cannot grow to meet increased demand, or otherwise fail to act, service interruptions may occur.
• Macro-Economic Risks: General economic conditions, existing or predicted inflation, interest rate variations, market volatility, changes in investment patterns and priorities, pandemics (such as COVID-19), and other events beyond our control all have an impact on business performance. The demand for our products and services may be reduced because of the current economic situation.
  

Valuation Methodology: Price to Earnings Per Share-based Relative Valuation

(Source: REFINITIV, Analysis by Kalkine Group)

*% Premium/(Discount) is based on our assessment of the company’s NTM 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 has a well-defined strategy for realising its unique ESG potential. Anti-money laundering, environmental, social, and governance (ESG), indexing, and investment analytics are among the key secular growth industries that the company is positioned to service. Furthermore, the company's strategy's progress on key measures confirms trust in the company's strategy. NDAQ’s stock price has fallen 23.39% in the past six months and is leaning towards the lower of its 52-week range of USD 214.96 to USD 140.31.

Based on the correction in stock price, top-line performance, healthy free cash flows, strategic growth of the company, associated risks, and current valuation, we recommend a "Buy" rating on the stock at the current market price of USD 153.10, as of June 03, 2022, at 08:15 AM PDT.

1 Year Technical Price Chart (as of June 03, 2022, at 08:15 AM PDT). Source: REFINITIV, Analysis by Kalkine Group

Technical Summary Analysis

Technical Indicators Defined: - 

Support: A level where-in the stock prices tend to find support if they are falling, and 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 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 unfavourable movement in the stock prices.

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

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from 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.