Nasdaq, Inc.
NDAQ
$109.68
-0.31%
Nasdaq, Inc. operates a diversified financial technology and market infrastructure franchise anchored by its flagship U.S. equity exchange, complemented by market data and index products, corporate listing services, and a fast-growing financial technology stack built through the Verafin and Adenza acquisitions spanning capital management, financial crime prevention, and regulatory compliance software. The company is best characterized as a platform incumbent transitioning from a transaction-driven exchange operator into a recurring-revenue technology vendor, with roughly 42.5% of sales from capital access, 35% from financial technology, and 22.5% from market services, giving it a distinct identity versus pure-play trading venues like Cboe or ICE. The current investor narrative centers on that software mix shift and its margin and revenue-durability implications, reinforced by the most recent quarter's 22.2% year-over-year revenue growth to $2.393 billion and a 61.9% gross margin, alongside strategic optionality from the SEC-cleared tokenized settlement pilot and new 'fast entry' index rules that could funnel high-profile listings such as SpaceX and OpenAI into Nasdaq's ecosystem. Debate now hinges on whether the fintech integration can sustain double-digit growth and whether the stock's sharp re-rating since late October reflects durable earnings power or an overextended momentum move.…
NDAQ
Nasdaq, Inc.
$109.68
Related headlines
Investment Opinion: Should I buy NDAQ Today?
Rating: Buy (accumulate on weakness, not at the current momentum peak). The core thesis is that Nasdaq is successfully re-rating itself from a transaction-driven exchange operator into a recurring-revenue financial technology platform — 22.2% YoY revenue growth to $2.393 billion, 27.7% net income growth to $540 million, and $2.258 billion of trailing free cash flow demonstrate that the Verafin/Adenza software mix is translating into durable earnings power. The 14 Buy / 3 Hold / 1 Sell analyst split (mean rating 1.83) and $115.375 average target anchor a constructive consensus, though the implied 7.6% upside from $107.24 is modest after a 16.1% one-month rally.
The supporting evidence is concrete: the trailing PE of 31.03x compresses 27% to a forward PE of 22.56x on consensus EPS of $6.20, and the PEG of 0.506 argues growth is not being overpaid for. Gross margin expanded from 59.20% in Q2 to 61.89% in Q3, EBITDA margin reached 39.78% ($952 million), and net margin of 22.57% sits well above the 21.60% recorded in Q3 2025. Free cash flow of $2.258 billion comfortably covers $173 million of quarterly dividends and $323 million of buybacks, with a 33.6% payout ratio leaving room for continued repurchases. Against a 6.75x sales and 20.65x EV/EBITDA multiple, the market is capitalizing recurring fintech revenue at a software-like rather than exchange-like multiple — defensible given 22% growth and 62% gross margins, but not a discount.
The risks that could invalidate the thesis are (1) a growth deceleration toward high single digits that compresses the multiple toward the ~21.9x trailing level seen as recently as Q2 2026, (2) margin pressure from integration costs given the current ratio of 1.005 and 8.5x interest coverage on $86 million of quarterly interest expense, and (3) mean reversion after the vertical October 22 gap from $96.12 to $103.30. This Buy would upgrade to a stronger conviction if the stock consolidates toward the $102–$103 breakout shelf or the $96 gap-fill zone without fundamental deterioration, and would downgrade to Hold if revenue growth slips below 15% or operating margin falls below 28%. Valuation verdict: fairly valued to modestly rich relative to its own three-year PE band (21.9x–40.4x), but reasonable on forward earnings for a 22%-growth, 62%-gross-margin business — the stock is closer to the optimistic end of its range than the average target implies, so position sizing matters more than direction.
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NDAQ 12-Month Price Forecast
The forward view is constructive but tempered by price. Nasdaq's fundamentals support the bull case — 22.2% revenue growth, 27.7% net income growth, $2.258 billion of trailing free cash flow, and a forward PE of 22.56x that is reasonable for a business with 62% gross margins — and the 14-to-1 buy-to-sell analyst split with no downgrades in the visible window confirms institutional conviction. However, the stock has already rallied 16.1% in a month and 22.9% in a year, leaving only 7.6% upside to the average target and placing the trailing PE in the upper-middle of its three-year band, so the base case (55% probability, $110–$120) assumes earnings grow into the multiple rather than the multiple expanding further. The bull case (25%, $125–$135) requires sustained 20%-plus growth plus monetization of tokenized settlement and fast-entry index rules, while the bear case (20%, $87–$96) prices in growth deceleration toward high single digits and margin compression. I would upgrade to high confidence if Q4 revenue growth holds above 20% with gross margin at or above 62%, and would downgrade to neutral if revenue growth slips below 15% or the stock breaks below the $102–$103 breakout shelf on volume.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Nasdaq, Inc.'s 12-month outlook, with a consensus price target around $115.38 and implied upside of +5.2% versus the current price.
Average Target
$115.38
18 analysts
Implied Upside
+5.2%
vs. current price
Analyst Count
18
covering this stock
Price Range
$87 - $135
Analyst target range
Coverage is solid for a large-cap financial-infrastructure name, with 16 analysts contributing a distribution of 14 Buy, 3 Hold, and 1 Sell, a consensus recommendation of 'buy,' and a mean rating of 1.83 on a 1-to-5 scale where lower is more bullish. The average target price of $115.375 implies roughly 7.6% upside from the $107.24 current price, which is a modest return for a stock that has already rallied 16.1% in a month and 22.9% in a year — the consensus is bullish in direction but has largely been outrun by price action, suggesting targets will need to be revised higher if the post-Q3 momentum holds. The institutional ratings log reinforces the constructive tone: Goldman Sachs, Morgan Stanley, JP Morgan, Barclays, TD Cowen, and Piper Sandler all reiterated Buy or Overweight ratings in October 2026, with Wells Fargo and Keefe, Bruyette & Woods holding at Equal Weight and Market Perform, and no downgrades recorded in the visible window. The target range of $87.00 to $135.00 is wide — a 55% spread from low to high — which signals genuine disagreement about the durability of the fintech-driven growth story rather than a lack of conviction. The $135 high target requires multiple expansion toward the upper end of the historical PE band plus continued 20%-plus revenue growth and successful monetization of initiatives like tokenized settlement and fast-entry index inclusion; the $87 low target, roughly 19% below the current price, effectively prices in a growth deceleration toward high single digits and margin compression from integration costs or a weaker trading environment. With consensus EPS of $6.20 (range $5.98–$6.40) and revenue of $7.524 billion, the Street is modeling a clean execution path, and the wide dispersion means position sizing should account for the possibility that the stock is closer to the optimistic end of its own valuation range than the average target implies.
Bulls vs Bears: NDAQ Investment Factors
The bull case currently has stronger evidence: 22.2% revenue growth, 27.7% net income growth, $2.258 billion of trailing FCF, a 22.56x forward PE, and a 14-to-1 buy-to-sell analyst split all point to a business executing on its software-mix transition. The bear case rests less on fundamentals than on price — the stock has already rallied 16.1% in a month and 22.9% in a year, leaving only 7.6% upside to the average target and placing the trailing PE in the upper-middle of its historical band. The single most important tension is whether the fintech integration (Verafin/Adenza) can sustain 20%-plus growth and margin leverage; if it does, the forward multiple is defensible and targets revise higher, but if growth decelerates toward high single digits, the multiple compresses toward the low-20s trailing range seen as recently as Q2 2026. Secondary swing factors are the tokenized settlement pilot and 'fast entry' index rules, which offer optionality but are not yet in consensus numbers. Net-net, the fundamentals support the constructive stance, but the risk/reward at $107.24 is less attractive than it was at the $96 pre-earnings level.
Bullish
- Revenue re-accelerating at 22.2% YoY: Q3 2026 revenue of $2.393 billion rose 22.22% from $1.958 billion a year earlier, and the sequential path ($2.080B Q4'25 → $2.137B Q1 → $2.532B Q2 → $2.393B Q3) shows a business running at a ~$9.1–9.5 billion annualized pace. Consensus revenue of $7.524 billion implies continued mid-teens-plus expansion, and the 22.2% print gives confidence that estimate is achievable rather than heroic.
- Forward PE of 22.6x is reasonable: Trailing PE of 31.03x compresses 27% to a forward PE of 22.56x, implying forward EPS of ~$6.20 versus ~$3.46 trailing. For a business growing revenue 22% with 61.9% gross margins, a 22.6x forward multiple is not stretched, and the PEG ratio of 0.506 argues growth is not being overpaid for.
- Operating leverage driving earnings growth: Net income grew 27.7% to $540 million in Q3 2026 from $423 million a year earlier, outpacing the 22.2% revenue growth and confirming positive operating leverage. Net margin expanded to 22.57% and EBITDA margin reached 39.78% ($952 million), evidence the fintech mix shift is translating into bottom-line earnings power.
- Strong free cash flow covers capital returns: Trailing-twelve-month free cash flow of $2.258 billion comfortably covers $173 million of quarterly dividends and $323 million of buybacks, with quarterly FCF of $459 million in Q3, $634 million in Q2, and $629 million in Q1. The 1.01% dividend yield with a 33.6% payout ratio leaves room for continued repurchases without external financing.
Bearish
- Price has outrun analyst targets: The stock is up 16.1% in a month and 22.9% in a year, leaving only 7.6% upside to the $115.375 average target — a modest return for a name that has already rallied hard. The consensus is bullish in direction but has largely been outrun by price action, meaning targets will need upward revision to justify further gains.
- Valuation sits in upper-middle of band: The trailing PE of 31.03x sits in the upper-middle of the stock's own three-year range of roughly 21.9x (Q2 2026) to 40.4x (Q4 2023), not at an extreme but not cheap. Any growth disappointment could compress the multiple toward the low-20s trailing range seen as recently as Q2 2026, a meaningful de-rating risk.
- Wide 55% target dispersion signals disagreement: The analyst target range of $87.00 to $135.00 is a 55% spread from low to high, signaling genuine disagreement about the durability of the fintech-driven growth story. The $87 low target, roughly 19% below the current price, prices in growth deceleration toward high single digits and margin compression from integration costs.
- Thin current ratio and moderate leverage: A current ratio of 1.005 leaves almost no short-term liquidity cushion, and debt-to-equity of 0.812 with ~8.5x interest coverage on $86 million of quarterly interest expense against $732 million of operating income is adequate but not fortress-like. This limits flexibility if integration costs or a weaker trading environment pressure cash flow.
NDAQ Technical Analysis
Nasdaq is in a sustained, accelerating uptrend, with the shares up 22.93% over the past year and 21.20% over six months, and the current price of $107.24 sits at roughly 87.9% of the 52-week range bounded by a $76.55 low and a $111.45 high. That positioning near the upper end of the range signals momentum leadership rather than a value setup, though it also leaves limited cushion before overextension becomes a concern; the stock is still about 3.8% below its 52-week high, so a clean breakout has not yet been confirmed. The trend structure is constructive, with the 52-week low set during the June drawdown (the series bottomed at $76.845 on June 29) and a steady series of higher lows since. Short-term momentum is decisively positive and diverging sharply from the broader market: the stock is up 16.10% over the past month and 13.37% over three months versus a 4.99% one-month and 4.91% three-month decline in SPY, producing relative strength readings of +21.09 and +18.28 percentage points, respectively. The one-month surge was concentrated in a single gap — the close jumped from $96.12 on October 21 to $103.30 on October 22, coinciding with the Q3 report filed October 22 — and the stock has consolidated in a $102–$109 band since, which reads as a healthy post-catalyst digestion rather than exhaustion. Momentum is therefore accelerating on both absolute and relative bases, and the absence of a conflicting short-term signal means the primary risk is mean reversion after a vertical move, not trend reversal. Key support sits at the $102–$103 breakout shelf, with deeper support at the $96 area and the $76.55 52-week low as the structural floor; resistance is the $111.45 52-week high, and a volume-backed break above it would confirm a new leg higher and likely invite momentum and index-driven flows. A failure back below $102 would flag a failed breakout and shift focus to the $96 gap-fill zone. Volatility is modest for an equity: beta of 0.957 implies roughly 4% less volatility than SPY, which supports larger position sizing on a risk-adjusted basis, but the 23.9% maximum drawdown over the lookback window is a reminder that this name can still deliver meaningful peak-to-trough pain, and the reported volume figure of 100 is not a usable liquidity gauge.
Beta
0.96
0.96x market volatility
Max Drawdown
-23.9%
Largest decline past year
52-Week Range
$77-$111
Price range past year
Annual Return
+24.9%
Cumulative gain past year
| Period | NDAQ Return | S&P 500 |
|---|---|---|
| 1m | +16.3% | -2.4% |
| 3m | +12.4% | -2.3% |
| 6m | +20.4% | +2.8% |
| 1y | +24.9% | +11.3% |
| ytd | +13.5% | +11.4% |
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NDAQ Fundamental Analysis
Revenue is growing at a healthy and re-accelerating clip: Q3 2026 revenue of $2.393 billion rose 22.22% year over year versus $1.958 billion in Q3 2025, and the sequential path from $2.080 billion in Q4 2025 to $2.137 billion in Q1, $2.532 billion in Q2, and $2.393 billion in Q3 shows a business running at a roughly $9.1–9.5 billion annualized pace. The segment mix reported for the period — Market Services at $1.221 billion, Capital Access Platforms at $641 million, and Market Technology at $529 million — indicates that the trading and market-services complex remains the largest single contributor, while the technology and capital-access lines provide the recurring, higher-quality growth that underpins the re-rating. Consensus modeled revenue of $7.524 billion (range $7.321–$7.709 billion) implies the market expects continued mid-teens-plus expansion, and the 22.2% print gives reasonable confidence that estimate is achievable rather than heroic. Profitability is solid and improving: Q3 net income was $540 million on a 22.57% net margin, with gross profit of $1.481 billion (61.89% gross margin), operating income of $732 million (30.59% operating margin), and EBITDA of $952 million (39.78% EBITDA margin). The margin trajectory is the key tell — gross margin moved from 59.20% in Q2 to 61.89% in Q3 and operating margin from 34.64% to 30.59%, with the sequential operating-margin dip driven by a $749 million operating expense base that included $561 million of G&A, so the story is one of structurally high and largely stable margins rather than dramatic expansion. Net income has compounded from $423 million in Q3 2025 to $540 million in Q3 2026, a 27.7% increase that outpaces revenue growth and confirms positive operating leverage. The balance sheet is sound but not fortress-like: debt-to-equity of 0.812, a current ratio of 1.005, and interest coverage of roughly 8.5x on $86 million of quarterly interest expense against $732 million of operating income leave adequate but not lavish headroom. Cash generation is the strongest part of the story, with trailing-twelve-month free cash flow of $2.258 billion and quarterly FCF of $459 million in Q3, $634 million in Q2, and $629 million in Q1, comfortably covering $173 million of quarterly dividends and $323 million of buybacks. Return on equity of 14.63% and return on assets of 6.09% are respectable for a capital-markets-infrastructure business, and the 1.01% dividend yield with a 33.6% payout ratio leaves room for continued repurchases without external financing dependence.
Quarterly Revenue
$2.4B
2026-09
Revenue YoY Growth
+22.2%
YoY Comparison
Gross Margin
61.9%
Latest Quarter
Free Cash Flow
$2.3B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is NDAQ Overvalued?
Because net income is positive ($540 million in Q3), the PE ratio is the appropriate primary metric, and the trailing PE of 31.03x against a forward PE of 22.56x is the single most informative data point in the valuation set. That 27% compression from trailing to forward earnings implies the market expects roughly $6.20 in forward EPS versus about $3.46 trailing, a step-change driven by margin leverage and the software mix — and it means investors are paying a much more reasonable multiple for next year's earnings than the headline trailing figure suggests. The PEG ratio of 0.506 is unusually low for a 31x trailing multiple and argues the growth is not being overpaid for, though the trailing EPS base is depressed enough that the ratio should be treated with caution. On peer comparison, the stock trades at 6.75x sales, 4.53x book, 11.83x EV/sales, and 20.65x EV/EBITDA, with a price-to-cash-flow of 24.58x — multiples that sit at a clear premium to a traditional exchange operator but are defensible against financial-data and software peers given the 22% revenue growth, 21.8% net margin, and 28.4% operating margin. The 20.65x EV/EBITDA is the most comparable cross-check and is elevated versus the historical enterprise-value multiple readings in the high-50s to low-80s on a different basis, so the cleanest read is that the market is capitalizing recurring fintech revenue at a software-like multiple rather than an exchange-like one. Historical context is the caution flag: the stock's own PE has ranged from roughly 21.9x (Q2 2026) to 40.4x (Q4 2023) over the past three years, and the current 31.03x sits in the upper-middle of that band rather than at an extreme, while the PS ratio of 6.75x is far below the 17–27x readings recorded across 2025–2026 on the historical series, a discrepancy that suggests the historical ratio set is computed on a different revenue base and should not be read literally. Net-net, the forward multiple of 22.56x is the anchor: it is not cheap, but it is not stretched for a business growing revenue 22% with 62% gross margins, and the risk is that any growth disappointment compresses the multiple toward the low-20s trailing range seen as recently as Q2 2026.
PE
31.0x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 20x~40x
vs. Industry Avg
33.3x
Industry PE ~33.3x*
EV/EBITDA
20.6x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks center on the balance sheet and the sustainability of the margin story. The current ratio of 1.005 leaves essentially no short-term liquidity cushion, and debt-to-equity of 0.812 with roughly 8.5x interest coverage on $86 million of quarterly interest expense against $732 million of operating income is adequate but not fortress-like. Operating margin actually dipped sequentially from 34.64% in Q2 to 30.59% in Q3 on a $749 million opex base including $561 million of G&A, so the margin trajectory is stable rather than dramatically expanding, and any integration-cost overrun from Verafin/Adenza would pressure the 22.57% net margin. Revenue also remains concentrated in the trading and market-services complex ($1.221 billion of the $2.393 billion Q3 total), leaving the company exposed to a weaker trading environment even as the recurring fintech lines grow.
Market and competitive risks are dominated by valuation compression and sector rotation. At 31.03x trailing and 22.56x forward earnings, 6.75x sales, and 20.65x EV/EBITDA, the stock trades at a clear premium to a traditional exchange operator and is being capitalized at a software-like multiple; if growth disappoints, the multiple could compress toward the low-20s trailing range seen as recently as Q2 2026. Beta of 0.957 implies roughly 4% less volatility than SPY, but the stock's 21.1 percentage-point one-month relative strength versus a 4.99% SPY decline cuts both ways — a rotation out of momentum winners would hit this name disproportionately. Competitive pressure from Cboe's record options volumes and ICE's broad-based trading and data growth (both Q3 beats) underscores that peers are executing, while the SpaceX/OpenAI/Anthropic 'fast entry' listings could force passive-fund rebalancing that pressures incumbent index constituents.
In a worst-case scenario, a growth deceleration toward high single digits combined with margin compression from integration costs would trigger a de-rating toward the analyst low target of $87.00, roughly 19% below the current $107.24. A more severe outcome — a weaker trading environment plus a failed breakout below the $102–$103 shelf and a gap-fill toward $96 — would put the stock on a path toward the $76.55 52-week low, a decline of approximately 28.6% from current levels. The 23.9% maximum drawdown over the lookback window is a realistic reminder of peak-to-trough pain this name can deliver, and the 55% spread between the $87 low and $135 high targets confirms genuine disagreement about the durability of the growth story. Investors should size positions assuming a realistic downside of -19% to -29% in an adverse scenario.
FAQ
Ranked by severity: first, growth-deceleration and multiple-compression risk — at 31.03x trailing and 20.65x EV/EBITDA, any slip in revenue growth from 22.2% toward high single digits could compress the multiple toward the ~21.9x trailing level seen in Q2 2026, a path toward the $87 analyst low (-19%). Second, financial and operational risk — a current ratio of 1.005 leaves almost no short-term liquidity cushion, debt-to-equity of 0.812 with ~8.5x interest coverage on $86 million of quarterly interest expense is adequate but not fortress-like, and operating margin already dipped sequentially from 34.64% in Q2 to 30.59% in Q3, so Verafin/Adenza integration overruns would hit the 22.57% net margin. Third, concentration and cyclicality — the trading and market-services complex contributed $1.221 billion of the $2.393 billion Q3 total, leaving exposure to a weaker trading environment even as fintech grows. Fourth, market and competitive risk — beta of 0.957 offers only modest downside cushion, the 21.1-point one-month relative strength versus a 4.99% SPY decline cuts both ways in a momentum rotation, and peers Cboe (record options volumes) and ICE (raised 2026 recurring revenue guidance) are executing strongly.
The base case carries 55% probability with a $110–$120 target range, assuming revenue growth decelerates modestly from 22.2% to the high-teens but stays above 15%, operating margin holds at 30–31%, forward PE stays near 22.6x as earnings grow into the multiple, and $2.2–2.3 billion of free cash flow funds dividends and buybacks without new debt — the stock drifts toward the $115.375 average analyst target. The bull case (25% probability, $125–$135) requires sustained 20%-plus growth with gross margin at or above 62%, plus monetization of the SEC-cleared tokenized settlement pilot and 'fast entry' index rules that could funnel SpaceX, OpenAI, and Anthropic listings into Nasdaq's ecosystem, driving the stock to the $135 high target. The bear case (20% probability, $87–$96) prices in growth slipping toward high single digits, margin compression below 28%, and a failed breakout below the $102–$103 shelf, with a more severe trading-environment shock extending toward the $76.55 52-week low. The base case is most likely, and its key assumption is that earnings compound into the forward multiple rather than the multiple expanding further.
Nasdaq looks fairly valued to modestly rich rather than cheap. The headline trailing PE of 31.03x compresses 27% to a forward PE of 22.56x on consensus EPS of $6.20, and the PEG of 0.506 argues growth is not being overpaid for, while 6.75x sales and 20.65x EV/EBITDA are premium multiples that capitalize recurring fintech revenue at a software-like rather than exchange-like rate. Against its own history, the trailing PE sits in the upper-middle of the roughly 21.9x (Q2 2026) to 40.4x (Q4 2023) three-year band — not an extreme, but not a discount either. The market is therefore pricing in continued high-teens-plus growth and stable 30–31% operating margins, with the forward multiple doing the heavy lifting rather than multiple expansion. If growth holds above 20% and gross margin stays at or above 62%, the stock can grow into the multiple; if growth slips toward high single digits, compression toward the low-20s trailing range seen as recently as Q2 2026 is the realistic outcome.
The risk/reward is constructive but not compelling at the current price. On the positive side, 14 of 16 analysts rate it Buy with a $115.375 average target (7.6% upside), forward EPS of $6.20 implies a 22.56x multiple that is reasonable for 22.2% revenue growth and 61.89% gross margins, and $2.258 billion of trailing free cash flow comfortably funds the 1.01% dividend and $323 million of quarterly buybacks. On the negative side, the stock has already rallied 16.1% in a month and 22.9% in a year, sits about 3.8% below its $111.45 52-week high, and the 55% spread between the $87 low and $135 high targets shows real disagreement about growth durability. The biggest downside risk is a de-rating toward the $87 analyst low (-19%) or the $76.55 52-week low (-28.6%) if fintech growth decelerates toward high single digits. It is a good buy for long-horizon investors accumulating on pullbacks toward the $102–$103 breakout shelf or the $96 gap-fill, but less attractive for momentum buyers chasing at $107.24 after a vertical move.
Nasdaq is better suited to a long-term hold than short-term trading. The business is a mid-to-late-stage compounder transitioning from transaction-driven exchange revenue to recurring fintech revenue, with 22.2% revenue growth, 27.7% net income growth, $2.258 billion of trailing free cash flow, and a 1.01% dividend at a 33.6% payout ratio — characteristics that reward multi-year ownership rather than tactical positioning. Volatility is modest for an equity (beta of 0.957, roughly 4% less than SPY), but the 23.9% maximum drawdown over the lookback window and the single October 22 gap from $96.12 to $103.30 show that short-term entries carry meaningful timing risk. Earnings visibility is reasonably good given the recurring fintech mix and 14 Buy ratings with no downgrades in the visible window, but the 55% target dispersion ($87–$135) means near-term outcomes are genuinely uncertain. A suggested minimum holding period is 18–24 months, long enough for the Verafin/Adenza integration and tokenized settlement monetization to show up in reported numbers, with new positions ideally built on pullbacks toward the $102–$103 shelf or the $96 gap-fill rather than at the current momentum peak.