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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Nasdaq (NDAQ) ten years ago? It may not have been easy to hold on to NDAQ for all that time, but if you did, how much would your investment be worth today?
Nasdaq's Business In-Depth
With that in mind, let's take a look at Nasdaq's main business drivers.
Founded in 1971 and headquartered in New York, Nasdaq Inc. is a leading provider of trading, clearing, marketplace technology, regulatory, securities listing, information and public and private company services.
The company’s global offerings are diverse and include trading and clearing across multiple asset classes, trade management services, data products, financial indexes, capital formation solutions, corporate solutions, and market technology products and services. Its technology powers markets across the globe, supporting equity derivative trading, clearing and settlement, cash equity trading, fixed income trading, trading surveillance and many other functions.
In the United States., the company operates The Nasdaq Stock Market, while in Europe, it operates exchanges in Sweden, Denmark, Finland, and Iceland as Nasdaq Nordic, and exchanges in Estonia, Latvia and Lithuania as Nasdaq Baltic.
Nasdaq manages, operates and provides products and services in four business segments: Market Services, Corporate Services, Information Services and Market Technology.
Market Services (68.1% of 2020 Revenues) : The segment includes Equity Derivative Trading and Clearing, Cash Equity Trading, FICC and Trade Management Services businesses.
Information Services (16.1%): The segment’s businesses include Market Data, Index and Investment Data & Analytics.
Corporate Services (9.4%) : The segment delivers critical capital market and governance solutions across the lifecycle of public and private companies. Its operations encompass Corporate Solutions and Listing Service.
Market Technology (6.4%): This business is a leading global technology solutions provider and partner to exchanges, clearing organizations, central securities depositories, regulators, banks, brokers, buy-side firms and corporate businesses.
Other Revenues include revenues from the Public Relations Solutions and Digital Media Services businesses, which were sold in April 2018.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Nasdaq, if you bought shares a decade ago, you're likely feeling really good about your investment today.
According to our calculations, a $1000 investment made in July 2011 would be worth $7,730.42, or a 673.04% gain, as of July 29, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 238.34% and the price of gold increased 6.95% over the same time frame in comparison.
Going forward, analysts are expecting more upside for NDAQ.
Shares of Nasdaq have outperformed the industry in a year. The company has been successful in maximizing opportunities as a technology and analytics provider and growing core marketplace businesses. Focus on growth via acquisitions and organic initiatives, which aided its entry into new markets and helped it gain cross-selling opportunities, bodes well. Intense focus on Market Technology and Information Services businesses also helps the company to explore vast opportunities per its developmental strategies. A strong balance sheet and robust cash position help capitalize on growth opportunities. Nasdaq remains committed to deploy capital effectively by investing in organic growth initiatives. However, escalating expenses due to general and administrative costs weigh on margin expansion. Moreover, the company’s high debt level poses risk.
The stock is up 5.53% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 5 higher, for fiscal 2021. The consensus estimate has moved up as well.
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Nasdaq, Inc. (NDAQ) : Free Stock Analysis Report
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