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Nasdaq (NDAQ) to Report Q3 Earnings: Is a Beat in Store?

Zacks Equity Research

Nasdaq NDAQ is slated to report third-quarter 2019 results on Oct 23, before market open. The company delivered positive earnings surprise in the last two reported quarters of 2019.

Let’s see how things have shaped up for this announcement.

Expansion of index and analytics businesses, growth in exchange data products across U.S. and Nordic equities, solid options and fixed income businesses are likely to have aided Nasdaq’s third-quarter performance.

Nasdaq’s third-quarter performance is also expected to reflect the contribution of eVestment and Quandl..

Non-trading revenues are likely to  have benefited from better performance of Market Technology, Index and Investment Data & Analytics businesses.

Market Technology and Information Services businesses offer the biggest growth opportunities. Organic expansion, Cinnober acquisition, higher software delivery and growing SaaS surveillance solution are likely to have fueled revenues. The Zacks Consensus Estimate for Marketing Information Service revenues is pegged at $196 million, indicating an increase of 9.5% from the year-ago reported figure.

The company reported solid volumes for third-quarter 2019. While U.S. equity options volume increased 6.6% year over year to 434 million contracts, European options and futures volume rose 20.4% year over year to 21.8 million contracts..

Though revenues per contract for U.S. equity options remained flat at 15 cents, the same for European options and futures deceased 18.7% to 39 cents.

Third-quarter revenues are expected to reflect higher listings. In the third quarter, there were 4,119 listed companies on Nasdaq compared with 4,059 in the year-ago period. Total listings grew 1.5% year over year to 4,119. The Zacks Consensus Estimate for listing services revenues is pegged at $74 million, indicating 2.8% increase from the year-ago period reported figure.

High debt level is likely to have resulted in higher interest expenses while organic growth initiatives are expected to have increased operating expenses. These are expected to have weighed on margin.

Continues share buyback is likely to have provided a boost to the bottom line.

The Zacks Consensus Estimate for earnings is pegged at $1.21, indicating 5.22% increase from the year-ago period reported figure.

Nasdaq, Inc. Price and EPS Surprise

Nasdaq, Inc. Price and EPS Surprise

Nasdaq, Inc. price-eps-surprise | Nasdaq, Inc. Quote

What Our Quantitative Model States   

Our proven model predicts an earnings beat for Nasdaq this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Nasdaq has an Earnings ESP of +0.06%. This is because the Most Accurate Estimate of $1.22 is pegged higher than the Zacks Consensus Estimate of $1.21. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Nasdaq carries a Zacks Rank #3.

Other Stocks to Consider

Here are some other stocks from the finance sector with the perfect combination of elements to surpass estimates in their upcoming releases.

MarketAxess Holdings MKTX is set to report third-quarter earnings on Oct 23. The stock has an Earnings ESP of +3.65% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

CME Group CME is set to report third-quarter earnings on Oct 30. The stock has an Earnings ESP of +1.35% and a Zacks Rank #2.

Cboe Global Markets CBOE is set to report third-quarter earnings on Nov 11. The stock has an Earnings ESP of +0.72% and a Zacks Rank of 3.

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