Intercontinental Exchange Stock Near Crucial Support – Buy Signal?
Intercontinental Exchange (ICE) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($147.53 – $163.05), levels from which it has bounced meaningfully before. In the last 10 years, Intercontinental Exchange stock received buying interest at this level 3 times and subsequently went on to generate 18.9% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 7/12/2024 | 12.8% | 104 |
| 12/19/2024 | 19.3% | 98 |
| 4/8/2025 | 24.6% | 118 |
But is the price action enough alone? It certainly helps if the fundamentals check out. For ICE Read Buy or Sell ICE Stock to see how convincing this buy opportunity might be.
Single stock can be risky, but there is a huge value to a broader diversified approach. Strategic asset allocation and diversification helps you stay invested. Did you know investors who panicked out of the S&P in 2020 lost significant upside that followed? Trefis High Quality Portfolio and Empirical Asset Management’s asset allocation approach are designed to reduce volatility so you can stay the course.
Here are some quick data points for Intercontinental Exchange that should help decision:
- Intercontinental Exchange Stock Pulls Back to Support – Smart Entry?
- How Will Intercontinental Exchange Stock React To Its Upcoming Earnings?
- After SPGI’s 6.7% Single Day Slide, ICE Looks Like the Stronger Long-Term Play
- How Will Intercontinental Exchange Stock React To Its Upcoming Earnings?
- Intercontinental Exchange Stock Gained 22% YTD, What’s Next?
- Intercontinental Exchange Stock Gained 15% YTD, What’s Next?
- Revenue Growth: 19.1% LTM and 10.0% last 3 year average.
- Cash Generation: Nearly 30.9% free cash flow margin and 37.5% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for ICE was 4.9%.
- Valuation: ICE stock trades at a PE multiple of 32.0
- Opportunity vs S&P: Compared to S&P, you get higher valuation, higher revenue growth, and better margins
For quick background, Intercontinental Exchange provides marketplaces for derivatives trading and clearing, fixed income data and execution, CDS clearing, and multi-asset class data and network services.
| ICE | S&P Median | |
|---|---|---|
| Sector | Financials | – |
| Industry | Financial Exchanges & Data | – |
| PE Ratio | 32.0 | 24.2 |
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| LTM* Revenue Growth | 19.1% | 5.2% |
| 3Y Average Annual Revenue Growth | 10.0% | 5.3% |
| Min Annual Revenue Growth Last 3Y | 4.9% | -0.1% |
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| LTM* Operating Margin | 37.5% | 18.6% |
| 3Y Average Operating Margin | 38.6% | 17.8% |
| LTM* Free Cash Flow Margin | 30.9% | 13.2% |
*LTM: Last Twelve Months
What Is Stock-Specific Risk If The Market Crashes?
That said, ICE isn’t immune to big drops. It fell about 74% during the Global Financial Crisis, which is huge. During the inflation shock and Covid pandemic, it lost roughly 34% and 33%, respectively. The 2018 correction wasn’t as painful but still a notable 13% decline. So yes, the stock has solid fundamentals, but in rough patches, even it can take a serious hit.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.