Nasdaq stock has been forming a large base since late 2021. The exchange's publicly-traded equity is now testing support at its 10-week moving average and trading below a fresh buy point.
Nasdaq Stock Forms Handle Entry
Nasdaq stock is trading 7% below a 64.88 handle entry. With the market pullback in recent weeks, NDAQ stock has drifted sideways while holding above key levels of support.
The stock's relative strength line is striking a new high this week, earning a Marketsmith Blue Dot, indicating superior performance compared to the S&P 500 index.
While Nasdaq stock slipped slightly below its 10-week line on Monday afternoon, shares could still bounce from this area of support. However, while the 10-week line has resumed its uptrend, the 40-week line remains in a downtrend.
The "B" Accumulation/Distribution Rating indicates Nasdaq stock is showing signs of accumulation by major institutions.
Additionally, fund ownership has risen to 1,748 in the most recent quarter, up from 1,715 in the prior quarter.
Nasdaq stock also maintains decent IBD Ratings, with a 93 Composite Rating, an 87 Relative Strength Rating and an 87 Earnings-Per-Share Rating.
More Than Just A Stock Exchange
Nasdaq is a major U.S. stock exchange, ranking second largest by market capitalization behind the New York Stock Exchange.
According to MarketSmith, Nasdaq's 2022 EPS is expected to rise only slightly, to $2.64 from $2.52 in 2021.
Earnings made a decent jump in 2021, up from $2.06 per share in the prior year. For 2023, EPS is expected to rise 6% to $2.81 per share.
While growth is expected to remain modest, the firm recently announced a nice dividend hike alongside its Q2 earnings report. Nasdaq stock currently yields an annualized dividend payout of about 4%.
Transaction levels are a key component in how stock exchanges make money but nontrading revenue represents the majority of income.
According to Nasdaq's recent Q2 2022 investor presentation, the firm operates four key business segments: market technology, investment intelligence, corporate platforms and market services. Nasdaq supports more than 2,000 banks and credit unions with its anti-financial-crime technology solutions and over 1,000 clients use its data and investment analytics offerings.
Over the last 12 months, Nasdaq has earned roughly $3.5 billion. $1.1 billion has come from the firm's investment intelligence segment. Meanwhile, the market services segment has earnings of $1.2 billion.
The corporate platforms segment is smaller, earning $653 million, while market technology brings up the rear with $500 million.
The company's recent filings indicate year-over-year profit and revenue growth at a modest 10%.
