Nasdaq (NASDAQ: NDAQ) is scheduled to report its fiscal Q4 2022 results on Wednesday, January 25, 2023. We expect Nasdaq to edge past the consensus estimates for revenues and earnings. The exchange reported mixed results in the last quarter, with the net revenues (total revenues minus transaction-based expenses) marginally missing expectations, despite increasing 6% y-o-y to $890 million. The growth was driven by an 8% rise in the non-trading revenues (solutions segment), supported by a 4% increase in the market services (trading revenues). We expect the same trend to continue in Q4.
Our forecast indicates that Nasdaq’s valuation is $68 per share, which is 8% above the current market price of around $62. Our interactive dashboard analysis on Nasdaq’s Earnings Preview has more details.
(1) Revenues expected to remain slightly above the consensus estimates
Nasdaq’s revenues grew 5% y-o-y to $4.6 billion in the first three quarters of 2022, translating into net revenues of $2.68 billion – up 6% y-o-y. It was due to higher revenues in the solutions segment (including market technology, investment intelligence, and corporate platforms).
- Total revenues in the market services segment increased by 3% y-o-y to $2.9 billion in the first nine months of 2022. However, it translated into net segment revenues of $923 million – just below the year-ago figure, due to higher transaction-based expenses. Further, the company has recently released the Q4 volume statistics. While it witnessed a 3% increase in the U.S. matched equity volume, all other categories posted a drop. We expect the fourth-quarter results to be on similar lines.
- The non-trading revenues increased 11% y-o-y to $1.74 billion in the first three quarters of the year. We expect the same trend to follow in Q4.
- Overall, we forecast Nasdaq’s total revenues to remain around $6.2 billion for the full year FY2022.
Trefis estimates Nasdaq’s fiscal Q4 2022 net revenues to be around $915 million, 1% above the $910 million consensus estimate.
2) EPS likely to marginally beat the consensus estimates
Nasdaq Q4 2022 adjusted earnings per share (EPS) is expected to be $0.67 per Trefis analysis, 3% above the consensus estimate of $0.65. The adjusted net income decreased 5% y-o-y to $884 million in the first nine months of 2022, because of lower non-operating income. We expect the fourth-quarter earnings to follow the same trend. Overall, Nasdaq is likely to report an annual GAAP EPS of $2.37 for the full-year 2022.
(3) Stock price estimate is 8% above the current market price
We arrive at NASDAQ’s valuation, using an EPS estimate of around $2.37 and a P/E multiple of just below 29x in fiscal 2022. This translates into a price of $68, which is 8% more than the current market price of close to $62.
Note: P/E Multiples are based on Share Price at the end of the year and reported (or expected) Adjusted Earnings for the full year
|S&P 500 Return||5%||5%||80%|
|Trefis Multi-Strategy Portfolio||10%||10%||245%|
 Month-to-date and year-to-date as of 1/24/2023
 Cumulative total returns since the end of 2016