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Based in New York, Nasdaq, Inc. (NDAQ) is a global leader in trading, clearing, marketplace technology, and regulatory services with a market cap of $34.4 billion. It operates diverse offerings, including trading across asset classes, trade management services, financial indexes, and market technology products. In the U.S., it operates The Nasdaq Stock Market; in Europe, exchanges include Nasdaq Nordic (Sweden, Denmark, Finland, Iceland) and Nasdaq Baltic (Estonia, Latvia, Lithuania).
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Nasdaq fits this criterion perfectly, exceeding the mark. The leading force in global markets is renowned for innovation and market leadership. Besides, it excels with cutting-edge solutions like Verafin for financial crime management and AxiomSL for risk data management within its Financial Technology segment.
However, the trading leader has fallen 6.3% from its 52-week high of $64.25, achieved on April 9. Moreover, NDAQ stock has dropped 4.5% over the past three months, underperforming the broader S&P 500 Index's ($SPX) 4.5% gain during the same time frame.
In the longer term, NDAQ is up 3.5% on a YTD basis, lagging behind the SPX's 15% gains. Also, NDAQ has surged 20.8% over the past 52 weeks, underperforming the SPX's 25.2% returns over the same time frame.
Despite trading above its 100-day moving average since mid-November with a few fluctuations, NDAQ stock has slipped below its 50-day moving average since late May, signaling a recent downturn in its bullish momentum.
Over the past year, NDAQ has struggled amid a volatile macroeconomic environment marked by high oil prices and elevated interest rates. Adding to its challenges, Nasdaq now confronts growing competition from the Texas Stock Exchange (TXSE), backed by prominent investors including BlackRock, Inc (BLK), The Goldman Sachs Group, Inc. (GS), The Charles Schwab Corporation (SCHW), and Citadel Securities. TXSE, which has raised $120 million, intends to file SEC registration documents under CEO James Lee's direction. It aims to appeal to companies seeking alternatives to the increasing compliance costs associated with listing on the Nasdaq and NYSE.
Additionally, the stock declined by 1.2% after the Q1 earnings release on April 25. The company reported an adjusted EPS of $0.63, which fell short of Wall Street's expectation of $0.65. Revenue for the quarter totaled $1.7 billion, with adjusted revenue reaching $1.12 billion, slightly exceeding analysts' forecast of $1.11 billion.
On the bright side, Nasdaq is set to expand its offerings in the short-term options market, responding to increasing investor interest in derivatives with swift expirations.
To underscore NDAQ's underperformance, rival Cboe Global Markets, Inc. (CBOE) has gained 27% over the past 52 weeks, higher than NDAQ’s return. But CBOE dropped 4.6% on a YTD basis, which is lower than NDAQ’s returns in 2024.
Given the stock's mixed performance, analysts remain cautiously optimistic about its prospects. The stock has a consensus rating of "Moderate Buy" from the 17 analysts covering the stock, and the mean price target of $67 reflects an upside of 11.3% from the prevailing price level.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
