Nasdaq, Inc.

(NASDAQ Global Select)
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Slightly Bullish +25

NDAQ Stock Trades Above 50-Day SMA: What Should Investors Do Now?

AI-generated analysis

πŸ“ˆ NDAQ is trading above its 50-day simple moving average, indicating a short-term bullish trend.

πŸ“‰ The current share price of $90.21 represents an 11.4% decline from its 52-week high of $101.79 as of April 7.

πŸš€ Shares have gained 11% in the past year, contrasting with a 7.8% decline for the industry.

πŸ’° NDAQ trades at a forward price-to-earnings multiple of 22.38X, which is higher than the industry average of 20.9X.

πŸ“Š Analysts expect 2026 earnings per share to increase by 10.9% year-over-year with revenue growing by 9.2%.

πŸ“… Growth projections extend to 2027, with anticipated earnings increases of 12% and revenue growth of 7.6%.

πŸ’Ή Long-term earnings growth is forecast at 12.7%, exceeding the industry average of 12.1%.

πŸ”Ό Analyst estimates for 2026 and 2027 have been raised over the past 30 days, increasing the consensus figures by 1.3% and 1.2% respectively.

🎯 The Zacks average price target is set at $109.65 per share, suggesting a potential upside of 22.53%.

βš™οΈ Return on equity for the trailing 12 months was 17.5%, outperforming the industry average of 16%.

πŸ’° Return on invested capital (ROIC) increased over recent quarters to 7.9%, compared to an industry average of 6.6%.

🌐 Organic growth is driven by non-trading segments including Trading Services, Data & Listing Services, and Anti-Financial Crime.

🀝 The company focuses on cross-selling products and integrating acquisitions to improve customer stickiness and revenue visibility.

πŸ’΅ NDAQ boasts a healthy balance sheet with a diverse business model generating modest operating cash flow.

πŸ“’ Management plans to raise the dividend payout ratio to 35-38% by 2027 and resume share buybacks.

πŸ›‘ Despite positive fundamentals, Zacks Investment Research maintains a "Hold" rating (Rank #3) for NDAQ.

Bullish Signals
  • Nasdaq shares have gained 11% in the past year, contrasting with the industry's decline of 7.8%.
  • The long-term earnings growth rate is expected to be 12.7%, which exceeds the industry average of 12.1%.
  • Eight of the 12 analysts covering the stock have raised their estimates for 2026, and nine have done so for 2027 over the past 30 days.
  • Based on analyst price targets, the Zacks average price target is $109.65 per share, suggesting a 22.53% upside from the last closing price of approximately $90.
  • Return on equity was 17.5%, surpassing the industry average of 16%, while ROIC was 7.9%, better than the industry average of 6.6%.
  • Nasdaq plans to resume share buybacks by 2027 and is targeting a dividend payout ratio of 35-38%, enhancing shareholder returns.
  • Growth in non-trading segments is being driven by higher Index revenues, increased demand for IR and ESG solutions, and increasing recurring data revenues.
Risk Factors
  • NDAQ is trading at a forward price-to-earnings multiple of 22.38X, which is higher than the industry average of 20.9X.
  • The stock has declined 11.4% from its 52-week high of $101.79, indicating potential weakness despite recent trading above the 50-day moving average.
  • Nasdaq shares are trading at a premium compared to competitors CME Group and Cboe Global Markets, suggesting they may be overvalued relative to peers like Intercontinental Exchange which trades at a discount.
  • Analyst estimates for future growth are consensus-driven with 17 analysts providing price targets, which can be volatile if market sentiment shifts negatively.
Full Analysis
Nasdaq, Inc. (NASDAQ: NDAQ) is currently trading above its 50-day simple moving average at $90.21, suggesting a short-term bullish trend despite being down 11.4% from its 52-week high of $101.79 as of April 7. The company has outperformed its industry sector, gaining 11% over the past year while the broader securities and exchange industry declined by 7.8%. Analysts view NDAQ with a forward price-to-earnings ratio of 22.38x, which is slightly above the industry average of 20.9x, whereas competitors like Intercontinental Exchange (ICE) trade at a discount while Cboe Global Markets (CBOE) and CME Group (CME) trade at a premium. Financial consensus estimates indicate strong growth prospects for Nasdaq, with 2026 earnings per share expected to rise by 10.9% and revenues projected to increase by 9.2%, leading to an estimated revenue of $5.73 billion. Analyst sentiment remains positive, with eight out of 12 analysts raising their 2026 estimates and nine out of 12 raising their 2027 estimates over the last 30 days, causing consensus estimates for those years to move up by 1.3% and 1.2%, respectively. Long-term earnings growth is forecasted at 12.7%, exceeding the industry average of 12.1%. The company demonstrates strong operational efficiency with a return on equity of 17.5% compared to an industry average of 16%, and a return on invested capital (ROIC) of 7.9% versus the industry average of 6.6%. Organic growth is being supported by a strategy to expand non-trading revenue streams in Trading Services, Marketplace Technology, Data & Listing Services, Index solutions, Workflow & Insights, and Anti-Financial Crime. These segments are benefiting from higher Index revenues, demand for IR and ESG solutions, steady analytics sales to asset managers, and increasing recurring data revenues, alongside cross-selling strategies and successful acquisitions that improve customer stickiness and market access. Nasdaq maintains a healthy balance sheet and cash position to support shareholder returns through potential dividend hikes and share repurchases, particularly as it offsets dilution from the Adenza buyout with resumed buybacks. The company aims to bring its payout ratio to between 35% and 38% by 2027 while continuing to invest in Market Technology and Information Services. Based on 17 analyst price targets, the average price target is set at $109.65, implying a potential upside of 22.53% from the last closing price. Despite these positive fundamentals and growth drivers, current analysts recommend retaining NDAQ with a Zacks Rank of #3 (Hold).