Last Update 26 Oct 25

Fair value Increased 0.98%

Analysts have slightly increased their price target for Nasdaq, raising it by $1.00 to $102.67. They cite strong recent earnings results and continued momentum in core business segments.

Analyst Commentary

Recent street research has highlighted both optimism and lingering questions around Nasdaq's near-term trajectory. Analysts continue to adjust their price targets as they weigh strong earnings reports, solid revenue growth, and the evolving business mix.

Bullish Takeaways

Multiple analysts raised price targets, signaling confidence in Nasdaq's financial outlook and ability to deliver on execution, particularly after strong Q3 results.
Revenue momentum in Financial Technology was singled out as a primary growth driver, with expectations that this trend can continue or possibly accelerate in coming quarters.
Nasdaq's transformation from a traditional exchange operator to a diversified technology provider, supported by the acquisitions of Verafin and Adenza, is seen as expanding its long-term growth opportunity set.
Growth in key segments such as Market Services and robust performance in Index are providing positive support to both revenue and earnings targets, with projected mid-to-high single digit revenue and low teens earnings growth over the medium term.

Bearish Takeaways

Some caution remains around softer revenue trends in specific segments, such as Index, which offset gains elsewhere in the business.
Analysts remain watchful of external market conditions, including volatility and trading volumes, which can impact core operations even amid broader momentum.
Lowered price targets by select analysts reflect an acknowledgment that, despite continued growth, certain headwinds or uncertainties could weigh on near-term valuation.
Growth projections and earnings beats are, in part, dependent on sustained success in recently acquired and newly integrated business units, which could present execution risk going forward.

What's in the News

Nasdaq temporarily halted trading in Apollomics (APLM) pending additional information from the company. Trading will resume only after Nasdaq's request is satisfied (Periodical).
Nasdaq repurchased over 1.2 million shares from July to September. This brings the total to 39.3 million shares under its long-term buyback program, with $3.8 billion invested since 2014 (Key Development).
New enhancements to the market surveillance platform have been unveiled, embedding advanced AI capabilities that strengthen detection and enforcement of market abuse for exchanges and regulators worldwide (Key Development).
The partnership with Amazon Web Services has been expanded, enabling Nasdaq Calypso to be offered as a fully managed service on AWS to support the modernization of capital markets and treasury infrastructure (Key Development).

Valuation Changes

Fair Value has increased slightly, up $1 to $102.67 from $101.67. This reflects updates to underlying growth and profitability assumptions.
Discount Rate is marginally higher at 8.55%, compared to the previous rate of 8.55%. This indicates a slightly higher required return for investors.
Revenue Growth estimates have improved, with the projected decline moderating from -9.20% to -8.60%.
Net Profit Margin has risen modestly to 33.91%, from 33.61% previously.
Future P/E has declined from 36.32x to 34.72x. This suggests a slightly lower valuation multiple on forward earnings.

Strategic investments in product innovation and market expansion are expected to drive revenue growth and strengthen Nasdaq's global position.
Partnerships with AWS and expansion of Verafin solutions are set to enhance operational efficiency and customer engagement for financial growth.
Regulatory and macroeconomic uncertainties, intense competition, and reliance on strategic partnerships pose risks to Nasdaq's growth, revenue, and margin stability.

Catalysts

About Nasdaq

Operates as a technology company that serves capital markets and other industries worldwide.What are the underlying business or industry changes driving this perspective?

Nasdaq's strategic investments in product innovation, international market expansion, and new product launches, especially in the index business, are expected to drive sustained revenue growth. These initiatives aim to strengthen their global position and diversify revenue streams from the Nasdaq 100, supporting long-term earnings performance.
The enhanced partnership with AWS is expected to modernize Nasdaq's market infrastructure across its financial services clientele, driving operational efficiencies, improving scalability, and potentially increasing market share, positively impacting net margins and future revenue growth.
The expansion of Verafin's AI-driven solutions is anticipated to enhance the platform's value, facilitating upselling opportunities, attracting new clients, and increasing engagement. This should support growth in ARR and revenue, contributing to profitability through increased customer retention and usage.
As Nasdaq continues to expand its global footprint with initiatives like opening a new regional headquarters in Texas and engaging with international financial markets, this geographic expansion is expected to widen its client base and strengthen revenue streams, thereby improving overall earnings sustainability.
Nasdaq's commitment to robust share repurchase programs and debt reduction initiatives is likely to enhance earnings per share (EPS) growth, providing a catalyst for stock valuation appreciation as the company returns capital to shareholders while maintaining financial flexibility.

Nasdaq Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Nasdaq's revenue will decrease by 9.2% annually over the next 3 years.
Analysts assume that profit margins will increase from 18.6% today to 33.5% in 3 years time.
Analysts expect earnings to reach $2.0 billion (and earnings per share of $3.63) by about September 2028, up from $1.5 billion today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 36.1x on those 2028 earnings, which is the same as it is today today. This future PE is greater than the current PE for the US Capital Markets industry at 26.7x.
Analysts expect the number of shares outstanding to decline by 0.17% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.5%, as per the Simply Wall St company report.

Nasdaq Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The macro environment is marked by significant uncertainty, driven by changing trade policies and geopolitical tensions, which could weigh on global GDP growth expectations and corporate decision-making, potentially impacting Nasdaq's revenue and growth prospects.
The delay in the decision-making process among clients, particularly for larger deals within the Financial Technology division, could lead to slower-than-expected revenue and ARR growth in subsequent quarters, affecting overall earnings.
Nasdaq faces intense competition from other exchanges and financial technology firms, which could impact their market share and growth, particularly in the listings and financial technology segments, influencing future revenue and margin performance.
Nasdaq's growth strategy involves a high dependence on strategic partnerships and acquisitions, such as the Adenza transaction, and their aim to achieve significant synergies; any failure to integrate or achieve expected efficiencies could affect net margins and long-term financial targets.
Regulatory and macroeconomic uncertainties, especially concerning new regulations for financial markets and technology integration (such as cloud migration), could impact client acquisition and retention, influencing Nasdaq’s future revenue and earnings stability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $100.667 for Nasdaq based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $115.0, and the most bearish reporting a price target of just $74.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $6.1 billion, earnings will come to $2.0 billion, and it would be trading on a PE ratio of 36.1x, assuming you use a discount rate of 8.5%.
Given the current share price of $94.88, the analyst price target of $100.67 is 5.7% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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