Nasdaq, Inc.
NDAQ
$93.97
+0.50%
Nasdaq, Inc. operates a diversified financial technology and data platform, best known for its namesake U.S. equity exchange, but the majority of its revenue now comes from higher-margin businesses: Capital Access Platforms (listing and index services), Market Technology (software for financial crime, regulatory compliance, and trading infrastructure), and Market Services (data and trading). The company has transformed from a pure exchange operator into a global technology and analytics provider, competing with the likes of ICE, CME, and LSEG, while leveraging its brand and network to cross-sell software and data solutions. Investor attention is currently focused on the company's ability to sustain double-digit revenue growth through its fintech pivot, particularly after the Adenza and Verafin acquisitions, and on the potential for margin expansion as integration costs fade. Recent news highlights Nasdaq's strategic moves to attract high-profile IPOs like SpaceX and OpenAI via 'fast entry' index rules, as well as its SEC-approved tokenized settlement pilot, which positions it at the forefront of digital asset infrastructure. These initiatives, alongside steady organic growth, underpin the debate over whether Nasdaq deserves a premium valuation as a tech-like compounder or remains a cyclical exchange play.…
NDAQ
Nasdaq, Inc.
$93.97
Related headlines
Investment Opinion: Should I buy NDAQ Today?
Rating: Buy. The core thesis is that Nasdaq is transitioning from a cyclical exchange into a higher-margin technology and data compounder, with 21.15% revenue growth and a forward PE of 20.1x that leaves room for re-rating if the projected 54% EPS growth is delivered. The analyst consensus of Buy (mean 1.83) and average target of $108.75, implying 15.7% upside, anchor a constructive view.
Supporting evidence includes Q2 2026 revenue of $2.532 billion up 21.15% YoY, gross margin expansion to 59.2% from 41.2% a year earlier, an operating margin of 34.6%, TTM free cash flow of $1.951 billion (about 3.5% yield), and a PEG of 0.51. The forward PE of 20.1x is in line with the 20-25x industry average even as the trailing PE of 31.0x and PS of 6.75x reflect a premium, and the 15.7% upside to the average target compares favorably with the stock's 6.86% one-year return.
Key risks are the 54% EPS growth assumption embedded in the forward multiple, leverage with debt-to-equity of 0.81 and a current ratio of 1.01, and the 58% spread in analyst targets from $84 to $133. The rating would upgrade to a stronger Buy if gross margin holds above 55% and revenue growth stays above 15%, and would downgrade to Hold if growth decelerates below 10% or the forward PE rises above 25x without matching earnings delivery. On balance, the stock looks fairly valued to modestly undervalued relative to its growth, with the forward multiple offering the better anchor than the trailing premium.
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NDAQ 12-Month Price Forecast
Nasdaq offers a credible fintech-compounder story with accelerating revenue, sharply improving margins, and a forward valuation in line with the industry, supported by a Buy consensus and 15.7% average target upside. The main caveat is that the forward PE of 20.1x requires roughly 54% EPS growth, and the 58% spread in analyst targets from $84 to $133 shows real disagreement about delivery. Recent relative strength of +4.65 points over one month suggests sentiment is turning after a -8.67 point one-year lag, but the stock remains down 2.78% year-to-date. I would upgrade to high confidence if gross margin holds above 55% and revenue growth stays above 15% for another quarter, and would downgrade to neutral if growth falls below 10% or the forward PE expands above 25x without matching earnings.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Nasdaq, Inc.'s 12-month outlook, with a consensus price target around $108.75 and implied upside of +15.7% versus the current price.
Average Target
$108.75
0 analysts
Implied Upside
+15.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$84 - $133
Analyst target range
Nasdaq is covered by 16 analysts, with a consensus recommendation of 'Buy' (mean rating 1.83 on a scale of 1 to 5, where 1 is Strong Buy). The average target price is $108.75, implying an upside of approximately 15.7% from the current price of $93.97. The consensus leans bullish, supported by the company's growth prospects and recent strategic initiatives. The target price range spans from a low of $84.00 to a high of $133.00, representing a wide spread of about 58% from the low to high, which signals high uncertainty and divergent views among analysts. The high target of $133 likely assumes continued double-digit revenue growth, successful integration of acquisitions, margin expansion, and perhaps multiple expansion, while the low target of $84 prices in slower growth, margin compression, or competitive pressures. Institutional ratings show a mix of Overweight, Buy, and Market Perform, with recent actions mostly reiterating positive ratings, indicating stable sentiment. The wide target spread suggests that while analysts are generally optimistic, there is significant disagreement about the pace and magnitude of future growth, which could lead to volatility in the stock price as new information emerges.
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Bulls vs Bears: NDAQ Investment Factors
The bull case rests on accelerating 21.15% revenue growth, dramatic gross margin expansion to 59.2%, and a forward PE of 20.1x that implies 54% EPS growth, backed by a Buy consensus and 15.7% average target upside. The bear case points to a 31x trailing PE premium, one-year underperformance of -8.67 points versus the S&P, a 58% wide analyst target spread, and leverage with a current ratio of 1.01. On balance, the bull evidence is currently stronger because the margin and growth trajectory are tangible and the forward valuation is reasonable, but the single most important tension is whether the projected 54% EPS growth is actually delivered; if it is, the stock re-rates higher, and if it is not, the trailing premium compresses sharply.
Bullish
- Revenue growth accelerating to 21.15% YoY: Q2 2026 revenue of $2.532 billion grew 21.15% year-over-year, a sharp acceleration from the mid-single-digit growth of prior years. Sequential revenue rose from $2.137 billion in Q1 2026 and $2.08 billion in Q4 2025, indicating building momentum from acquisitions and organic expansion.
- Forward PE of 20.1x implies 54% EPS growth: The trailing PE of 31.0x drops to a forward PE of 20.1x, implying the market expects roughly 54% EPS growth over the next year. This forward multiple sits in line with or slightly below the 20-25x industry average, suggesting the stock is not expensive on expected earnings.
- Margin expansion from 41.2% to 59.2% gross: Q2 2026 gross margin reached 59.2%, up from 44.4% in Q3 2025 and 41.2% in Q2 2025, while the operating margin hit 34.6%. This improvement reflects a favorable revenue mix shift toward higher-margin technology and data businesses as integration costs fade.
- Analyst consensus Buy with 15.7% upside: All 16 covering analysts have a mean rating of 1.83 (Buy), with an average target price of $108.75 versus the current $93.97, implying 15.7% upside. The high target of $133 suggests some analysts see substantially more room if growth and margin expansion persist.
Bearish
- One-year underperformance vs. S&P 500: NDAQ has gained only 6.86% over the past year versus the S&P 500's 15.53%, a relative weakness of -8.67 percentage points. Year-to-date the stock is down 2.78% while the S&P is up 11.93%, a -14.71 point relative gap, showing persistent lag despite recent recovery.
- Trailing valuation rich at 31x PE and 6.75x PS: The trailing PE of 31.0x is above the 20-25x industry average, and the price-to-sales ratio of 6.75x exceeds the typical 4-5x for the sector. The market is paying a premium that requires the projected 54% EPS growth to materialize.
- Wide analyst target spread signals uncertainty: Targets range from $84 to $133, a 58% spread from low to high, indicating significant disagreement about growth durability. The low target of $84 is below the current price, implying downside risk if integration or growth disappoints.
- Moderate leverage and thin current ratio: Debt-to-equity of 0.81 and a current ratio of just 1.01 leave limited liquidity buffer. Interest expense of $86 million in Q2 2026 and total other expenses of -$224 million weigh on net income, which fell to $507 million from $519 million in Q1 despite higher revenue.
NDAQ Technical Analysis
Nasdaq's stock is in a recovery phase within a broader range, with a 1-year price change of +6.86% that lags the S&P 500's +15.53% gain, reflecting relative underperformance. The current price of $93.97 sits at approximately 69% of the 52-week range (low of $76.55, high of $101.79), indicating the stock is in the upper half but not at extremes, suggesting room for further upside if momentum persists. This positioning implies moderate momentum without overextension, as the stock has rebounded from its June lows but has yet to challenge the 52-week high. Short-term momentum is accelerating, with a 1-month gain of +5.87% and a 3-month gain of +2.54%, both outpacing the S&P 500's +1.22% and +2.69% respectively, and relative strength over the past month is +4.65 percentage points. This recent outperformance contrasts with the 1-year relative weakness (-8.67 percentage points), signaling a potential trend reversal or mean-reversion rally as the stock recovers from a mid-year drawdown. The 6-month change of +6.05% also exceeds the S&P's +7.48%? Actually, it lags slightly, but the recent acceleration is notable. Key technical levels include support at the 52-week low of $76.55, which also aligns with the June trough, and resistance at the 52-week high of $101.79. A breakout above resistance would confirm a new uptrend and could target higher levels, while a breakdown below support would signal renewed weakness. The stock's beta of 0.998 indicates volatility roughly in line with the market, implying that position sizing should account for market-like risk, with a max drawdown of -23.9% highlighting the potential for significant declines during stress periods.
Beta
1.00
1.00x market volatility
Max Drawdown
-23.9%
Largest decline past year
52-Week Range
$77-$102
Price range past year
Annual Return
+6.9%
Cumulative gain past year
| Period | NDAQ Return | S&P 500 |
|---|---|---|
| 1m | +5.9% | +0.2% |
| 3m | +2.5% | +2.9% |
| 6m | +6.0% | +8.4% |
| 1y | +6.9% | +14.9% |
| ytd | -2.8% | +11.9% |
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NDAQ Fundamental Analysis
Nasdaq's revenue trajectory shows robust growth, with the most recent quarter (Q2 2026) delivering $2.532 billion, up 21.15% year-over-year, driven by strong performance across its Capital Access Platforms, Market Technology, and Market Services segments. Sequentially, revenue increased from $2.137 billion in Q1 2026 and $2.08 billion in Q4 2025, indicating accelerating momentum, while the 2025 full-year revenue was approximately $8.2 billion. The 21.15% YoY growth rate is a significant acceleration from the mid-single-digit growth seen in prior years, reflecting the contribution of acquisitions and organic expansion. This growth trend supports the investment case for Nasdaq as a structural grower, though investors should monitor whether this pace is sustainable as acquisition synergies mature. Profitability remains solid, with Q2 2026 net income of $507 million and a net margin of 20.0%, while the gross margin was 59.2% for the quarter, up from 44.4% in Q3 2025 and 41.2% in Q2 2025, indicating margin expansion. The operating margin for Q2 2026 was 34.6%, and the trailing twelve-month (TTM) operating margin is 28.4%, reflecting improved cost efficiency. The company is firmly profitable, and the margin trajectory is positive, though the gross margin can fluctuate due to revenue mix and acquisition accounting. The balance sheet shows a debt-to-equity ratio of 0.81, which is moderate, and a current ratio of 1.01, suggesting adequate liquidity. Free cash flow (FCF) for Q2 2026 was $634 million, and TTM FCF is $1.951 billion, providing ample coverage for dividends ($174 million in Q2) and share repurchases ($355 million in Q2). The FCF yield is approximately 3.5% (TTM FCF of $1.951 billion divided by market cap of $55.4 billion), which is reasonable for a financial infrastructure company. Return on equity (ROE) is 14.6%, indicating efficient use of equity, while the company's cash flow generation supports its investment-grade profile and ability to fund growth initiatives internally.
Quarterly Revenue
$2.5B
2026-06
Revenue YoY Growth
+21.1%
YoY Comparison
Gross Margin
59.2%
Latest Quarter
Free Cash Flow
$2.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is NDAQ Overvalued?
Given Nasdaq's positive net income, the PE ratio is the primary valuation metric. The trailing PE is 31.0x, while the forward PE is 20.1x, implying the market expects significant earnings growth (approximately 54% EPS growth) over the next year. This large gap between trailing and forward multiples suggests that analysts anticipate strong profit acceleration, likely driven by margin expansion and revenue growth. Compared to the industry average, Nasdaq's valuation appears rich on a trailing basis but more reasonable on a forward basis. The financial data & stock exchanges industry typically trades at a PE of around 20-25x, so the forward PE of 20.1x is in line with or slightly below the sector, while the trailing PE of 31.0x represents a premium. The PEG ratio of 0.51 is attractive, indicating that the stock is undervalued relative to its expected growth rate, though this metric can be volatile. On a price-to-sales (PS) basis, Nasdaq trades at 6.75x, which is above the industry average of around 4-5x, reflecting its higher growth and margins. Historically, Nasdaq's PE ratio has ranged from 20x to 40x over the past few years, and the current trailing PE of 31.0x is near the middle of that range, while the forward PE of 20.1x is near the low end, suggesting that the market is pricing in optimistic earnings growth but not extreme optimism. The price-to-book (PB) ratio of 4.53x is also elevated compared to historical levels, but justified by the company's intangible-heavy asset base and high returns.
PE
31.0x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 20x~40x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
20.6x
Enterprise Value Multiple
Investment Risk Disclosure
Nasdaq's financial risks center on its acquisition-driven growth model and moderate leverage. Debt-to-equity of 0.81 and a current ratio of just 1.01 provide a thin liquidity cushion, while Q2 2026 interest expense of $86 million and total other expenses of -$224 million dragged net income to $507 million from $519 million in Q1 despite revenue rising to $2.532 billion. The forward PE of 20.1x embeds roughly 54% EPS growth, so any shortfall in Adenza or Verafin integration, or a revenue mix shift that reverses the gross margin gain from 41.2% to 59.2%, would pressure both earnings and the multiple. Revenue concentration in Capital Access Platforms (42.5% of sales) and financial technology (35%) also ties results to IPO and listing cycles.
Market and competitive risks include valuation compression given the trailing PE of 31.0x versus a 20-25x industry average and PS of 6.75x versus 4-5x for peers. With a beta of 0.998, NDAQ offers no defensive offset in a market selloff, and its 1-year relative weakness of -8.67 points versus the S&P shows it can lag even in a rising market. Competition from ICE, CME, and LSEG in data and exchange services, plus regulatory scrutiny of 'fast entry' index rules for SpaceX and OpenAI IPOs, could pressure pricing and listing economics. The SEC-approved tokenized settlement pilot is a long-term opportunity but also invites regulatory and operational risk as digital asset infrastructure evolves.
A worst-case scenario would combine an earnings miss that breaks the 54% EPS growth assumption, a reversal in gross margin toward the 41-44% levels of 2025, and a broad market drawdown. The stock's 52-week low of $76.55 represents about -18.5% from the current $93.97, and the analyst low target of $84 implies roughly -10.6% downside. A deeper stress scenario toward the -23.9% max drawdown would take the shares to approximately $71.5, a loss of about -24% from current levels. Investors should size positions for a realistic -18% to -24% drawdown if growth and margin expectations disappoint.
FAQ
The most severe risk is earnings delivery: the forward PE of 20.1x requires about 54% EPS growth, and a shortfall would compress the trailing 31.0x multiple toward the industry average. Financial risk comes from debt-to-equity of 0.81 and a current ratio of 1.01, with Q2 2026 interest expense of $86 million weighing on net income. Competitive and regulatory risk includes pressure from ICE, CME, and LSEG plus scrutiny of fast-entry index rules that could delay IPO pipeline benefits. Company-specific risk is acquisition integration, since Adenza and Verafin underpin the 21.15% revenue growth and any stumble would hit both growth and margins.
The 12-month forecast has a 50% base case of $105-$112, aligned with the $108.75 average analyst target and consensus EPS of $6.15. The 25% bull case of $120-$133 assumes revenue growth above 15%, gross margin near 59%, and the 54% EPS growth materializing, while the 25% bear case of $76.55-$84 assumes growth below 10% and margin reversion toward 41-44%. The base case is most likely because it requires only modest deceleration from the current 21.15% growth and stable margins. The key assumption is that Adenza and Verafin synergies continue to support high-teens revenue growth without further margin slippage.
On trailing metrics NDAQ looks expensive, with a PE of 31.0x versus a 20-25x industry average and a PS of 6.75x versus 4-5x for peers. However, the forward PE of 20.1x is in line with or slightly below the sector, and the PEG of 0.51 suggests the stock is cheap relative to expected growth. The market appears to be paying a premium for the fintech transformation while pricing in roughly 54% EPS growth, so the valuation is fair to modestly undervalued if that growth is delivered. The 58% spread in analyst targets from $84 to $133 shows the market has not settled on a single valuation framework.
From a risk/reward perspective, NDAQ offers 15.7% upside to the $108.75 average analyst target against roughly -10.6% downside to the $84 low target and about -18.5% to the 52-week low of $76.55. The forward PE of 20.1x is reasonable relative to the 20-25x industry average and implies 54% EPS growth, while the PEG of 0.51 and 3.5% FCF yield support the valuation. The biggest downside risk is that the projected EPS acceleration fails to materialize, which would compress the trailing 31.0x multiple. It is a good buy for growth-at-a-reasonable-price investors with a 12-24 month horizon who can tolerate a beta of 0.998 and a -23.9% max drawdown, but less suited to investors seeking income given the 1.08% dividend yield.
NDAQ is better suited to a medium-to-long-term holding period of at least 12-24 months, given its growth-stage fintech transformation and the time needed for Adenza and Verafin synergies to fully materialize. The beta of 0.998 means it moves with the market, and the -23.9% max drawdown shows it can suffer meaningful short-term losses, making it a poor candidate for short-term trading. The 1.08% dividend yield and 33.6% payout ratio provide modest income but are not the primary return driver. Earnings visibility is improving with 21.15% revenue growth and a 59.2% gross margin, but the 58% analyst target spread means near-term volatility is likely. A minimum 12-month holding period is suggested to ride through integration and macro noise.
