Will Nasdaq (NDAQ) Retain Its Earnings Surprise Streak in 4Q?
Nasdaq, Inc. NDAQ is slated to report fourth-quarter 2023 earnings on Jan 31, before the opening bell. The company delivered an earnings surprise in each of the trailing three reported quarters of 2023.
Factors to Consider
Nasdaq’s fourth-quarter performance is likely to have benefited from organic revenue growth, strong performance at Market Platforms businesses, data and listing service revenues, and contributions from the Adenza acquisition.
Improved performance at Market Technology, Market Data and Analytics businesses is expected to have benefited non-trading revenues.
Recurring data revenues across its international footprint are likely to have aided revenues.
Improved trade management services and market technology are likely to have aided the
Marketplace Technology business. We expect Marketplace Technology revenues to increase 2.3% to $152.4 million.
Organic growth initiatives are likely to have aided Anti Financial Crime’s revenues. Increased subscriptions from new and existing clients are likely to have benefited from solid demand for trade surveillance and crypto market surveillance solutions, aiding surveillance solutions revenues. We estimate Anti Financial Crime revenues to increase 19.2% year over year to $97.7 million. The Zacks Consensus Estimate for the metric is pegged at $117 million.
Expenses are likely to have increased owing to the development and diversification of its business, compensation and benefits, merger and strategic initiatives, restructuring charges, general, administrative and other expenses. These are expected to have weighed on margin expansion.
An increase in compensation and benefits as well as computer operations & data communications likely have increased total expenses for the to be reported quarter. We expect non-GAAP operating expenses to increase 4.2% year over year.
The continued share buyback is anticipated to have provided an additional boost to the bottom line.
The Zacks Consensus Estimate for earnings is pegged at 69 cents per share, indicating a 7.8% increase from the prior-year reported figure.
Q4 Volumes
Nasdaq reported soft volumes for fourth-quarter 2023. U.S. equity options volume increased 1% year over year to 781 million contracts. European options and futures volume decreased 4% year over year to 17 million contracts.
Revenues per contract for U.S. equity options remained flat year over year at 12 cents, while the same for European options and futures decreased 2% to 46 cents.
Under its cash equities, Nasdaq’s U.S. matched equity volume in the fourth quarter grossed 113.3 billion shares, down 6.8% from the prior-year quarter’s level. European equity volume increased 1.5% year over year to $200 billion.
In the fourth quarter, there were 4,662 listed companies on Nasdaq compared with 4,953 in the year-ago period. Total listings dropped 4% year over year to 5,262.
We expect data and listing services revenues to increase 3.1% to $189.4 million in the to-be-reported quarter.
What Our Quantitative Model States
Our proven model expects Nasdaq to post an earnings beat this time around. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
Earnings ESP: Nasdaq has an Earnings ESP of +0.43% at present. This is because the Most Accurate Estimate of 70 cents is pegged higher than the Zacks Consensus Estimate of 69 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Nasdaq, Inc. Price and EPS Surprise
Nasdaq, Inc. price-eps-surprise | Nasdaq, Inc. Quote
Zacks Rank: Nasdaq currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Coinbase Global COIN has an Earnings ESP of +160.6% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for fourth-quarter 2023 earnings is pegged at a loss of 12 cents, indicating an improvement of 95.2% from the year-ago reported figure.
COIN’s earnings beat estimates in three of the trailing four quarters and missed the same in one.
CME Group CME has an Earnings ESP of +0.01% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for fourth-quarter 2023 earnings is pegged at $2.21 per share, implying an increase of 11.6% from that reported in the year-ago quarter.
CME’s earnings beat estimates in each of the trailing four quarters.
Intercontinental Exchange ICE has an Earnings ESP of +0.31% and a Zacks Rank of 3 at present. The Zacks Consensus Estimate for fourth-quarter 2023 bottom line is pinned at $1.29, indicating an increase of 23.5% from that reported in the year-ago quarter.
ICE’s earnings beat estimates in three of the trailing four quarters and missed the same in one.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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