Nasdaq, Inc. (NASDAQ: NDAQ)

Sector: Financial Services Industry: Financial Data & Stock Exchanges CIK: 0001120193
Market Cap 49.34 Bn
P/B 9.82
P/E 112.66
P/S 15.25
ROIC (Qtr) 8.25
Div Yield % 0.32
Rev 1y % (Qtr) 2.94
Total Debt (Qtr) 9.55 Bn
Debt/Equity (Qtr) 0.79

About

Price action

Investment thesis

Bull case

  • Operating cash flow of 2.33B provides strong 14.78x coverage of stock compensation 158M, indicating sustainable incentive practices.
  • Robust free cash flow of 2.10B exceeds capital expenditure of 237M by 8.85x, indicating strong organic growth funding capability.
  • Tangible assets of 9.70B provide exceptional 13.49x coverage of deferred revenue 719M, showing strong service capability backing.
  • Operating cash flow of 2.33B provides strong 3.25x coverage of deferred revenue 719M, indicating service delivery capability.
  • Retained earnings of 9.22B provide full 1.01x coverage of long-term debt 9.12B, indicating strong internal capital position.

Bear case

  • Operating cash flow of 2.33B barely covers its investment activities of (1.47B), with a coverage ratio of -1.59, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 2.33B provides thin coverage of dividend payments of (586M) with a -3.98 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High financing cash flow of (2.41B) relative to working capital of (108M), which is 22.31x suggests concerning dependence on external funding for operational needs.
  • Free cash flow of 2.10B represents just -2.31x of debt issuance (907M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Debt issuance of (907M) significantly exceeds working capital of (108M), which is 8.40x, indicating potentially unsustainable leverage for operational funding.

Segments Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Financial Data & Stock Exchanges
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CME Cme Group Inc. 108.31 Bn 56.60 23.47 152.46 Bn
2 MCO Moodys Corp /De/ 106.86 Bn 244.59 56.48 7.36 Bn
3 SPGI S&P Global Inc. 105.67 Bn 43.02 13.77 11.87 Bn
4 ICE Intercontinental Exchange, Inc. 96.76 Bn 29.19 7.65 20.28 Bn
5 NDAQ Nasdaq, Inc. 49.34 Bn 112.66 15.25 9.55 Bn
6 MSCI MSCI Inc. 42.66 Bn 35.48 13.61 6.31 Bn
7 COIN Coinbase Global, Inc. 41.84 Bn 13.00 5.45 7.59 Bn
8 CBOE Cboe Global Markets, Inc. 28.66 Bn 29.30 6.21 1.57 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.79 2.21
EV to Cash from Ops. EV/CFO 87.29 43.43
EV to Debt EV to Debt 5.73 7.86
EV to EBIT EV/EBIT 77.85 35.32
EV to EBITDA EV/EBITDA 68.76 31.71
EV to Free Cash Flow [EV/FCF] EV/FCF 93.40 -19.56
EV to Market Cap EV to Market Cap 1.11 1.38
EV to Revenue EV/Rev 16.92 24.41
Price to Book Value [P/B] P/B 9.82 -8.37
Price to Earnings [P/E] P/E 112.66 62.31
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.77 2.12
Dividend Payout Ratio % Div Payout % (Qtr) 35.90 32.41
Dividend per Basic Share Div per Share (Qtr) 1.02 2.65
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 27.90 26.82
Interest Coverage Int. cover (Qtr) 6.29 8.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -25.40 -8.40
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 126.30 24.23
Dividend Growth (1y) % Div 1y % (Qtr) 10.87 1.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 51.83 10.48
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 28.08 15.08
EBIT Growth (1y) % EBIT 1y % (Qtr) 39.19 17.37
EBT Growth (1y) % EBT 1y % (Qtr) 55.35 21.15
EPS Growth (1y) % EPS 1y % (Qtr) 70.06 30.92
FCF Growth (1y) % FCF 1y % (Qtr) 43.50 30.86
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 12.03 13.71
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.27 0.61
Cash Payout Ratio Cash Payout (Qtr) 0.23 0.24
Cash Ratio Cash Ratio (Qtr) 0.09 0.51
Current Ratio Curr Ratio (Qtr) 0.99 1.98
Debt to Equity Ratio Debt/Equity (Qtr) 0.79 0.60
Interest Cover Ratio Int Coverage (Qtr) 6.29 8.17
Times Interest Earned Times Interest Earned (Qtr) 6.29 8.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 36.80 -985.10
EBIT Margin % EBIT Margin % (Qtr) 29.17 -991.86
EBT Margin % EBT Margin % (Qtr) 24.53 -1,071.03
Gross Margin % Gross Margin % (Qtr) 62.30 72.64
Net Profit Margin % Net Margin % (Qtr) 19.90 -1,440.91