VALUATION HIGHLIGHTS

1. Capital Access Platform constitutes 46% of the Trefis price estimate for Nasdaq OMX Group's stock.
2. Financial Technology constitutes 32% of the Trefis price estimate for Nasdaq OMX Group's stock.
3. Market Services constitute 21% of the Trefis price estimate for Nasdaq OMX Group's stock.

WHAT HAS CHANGED?

Latest Earnings

In Q1 2024, NASDAQ reported Total Net Revenues of $1.12 billion - 22% more than the figure a year ago. It was mainly driven by higher financial technology and capital access platform revenues. Notably, the company posted net revenues of $3.9 billion in FY 2023 - up 9% y-o-y.

Stock Split

The company's stock underwent a three-for-one split on August 29, 2022.

POTENTIAL UPSIDE & DOWNSIDE TO TREFIS PRICE

Below are some key drivers of NASDAQ's value with potential upside or downside to our price estimate for the company's stock.

• Daily Volume of U.S. derivative Contracts The daily volume of U.S. derivative contracts traded across all exchanges in the U.S. has reached over 40.4 million in 2023, and we estimate that it will be around 45 million by the end of our forecast period.
• Market Share of U.S. Listed Shares NASDAQ's share in the U.S. market decreased from 17.12% in 2021 to 16.44% in 2023. We expect NASDAQ's market share to increase slightly in the near term and stabilize at about 16.6% throughout our forecast period. If NASDAQ gains another 7% market share by the end of our forecast period, this will present an upside of about 4% to our price estimate

BUSINESS SUMMARY

Nasdaq OMX Group ("NASDAQ") is a global exchange group that provides trading, exchange technology, securities listing, and public company services globally. The company's financial services include equity and derivatives trading, market data products, index services, financial services, and market technology products.

SOURCES OF VALUE

NASDAQ Stock Market

On March 31, 2024, the NASDAQ Stock Market had 5,223 listed companies. The company also operates a second equity market in addition to options and futures markets and a derivative clearinghouse. The NASDAQ market is the company's most well-known brand, and U.S. cash-equity trading accounts for under 20% of the company's top line, according to Trefis estimates.

Europe Operations

In Europe, NASDAQ operates the NASDAQ OMX Nordic, NASDAQ OMX Baltic, and NASDAQ OMX Europe, in addition to NASDAQ OMX Commodities and NASDAQ OMX Armenia. According to Trefis estimates,

KEY TRENDS

Economic recovery to drive volumes

Over the past couple of years, recovery in economic conditions and a positive outlook of the capital markets have heightened investor confidence and improved the financial condition of listed companies. Consequently, the company saw strong growth in the number of new listings on the exchange. Further, enhanced volatility has resulted in greater trading volumes. As economic conditions continue to improve, we expect these trends to be sustained in the near term and drive growth in trading volumes and listings.

Intense competition among exchanges

There is intense competition among exchange operators such as IntercontinentalExchange Group (which owns NYSE), NASDAQ OMX Group, and CME Group for trading volumes, listings, and technology services customers. Newer entrants have tried to offer discounted fees to attract volumes, which could force NASDAQ to follow suit. This could impact revenues and, in turn, margins.