A a month has passed since the last Nasdaq results report (NDAQ). Stocks added about 2.3% during that time, outperforming the S&P 500.
Will the recent positive trend continue until its next earnings release, or should the Nasdaq retreat? Before we dive into how investors and analysts have reacted in recent times, let’s take a look at the latest earnings report to get a better grasp of the important factors.
Nasdaq beats on Q1 earnings and income, dividend rises
The Nasdaq reported adjusted earnings per share of $ 1.96 in the first quarter of 2021, beating Zacks’ consensus estimate of $ 1.74 by 12.6%. Net income increased 31% year over year.
The improvement is mainly due to organic growth, favorable exchange rate movements, expanding margins and strong sector performance.
Performance in detail
Nasdaq’s $ 851 million revenue grew 21% year over year. The increase is mainly attributable to a positive impact of $ 118 million from organic growth, an impact of $ 18 million from favorable exchange rate variations and an increase of $ 14 million from the inclusion of revenues. acquisitions. The top line beat Zacks’ consensus estimate by 2.8%.
Adjusted operating expenses were $ 393 million, up 17% from a year ago due to an organic increase of $ 24 million, an increase of $ 18 million from acquisitions and an increase of $ 15 million due to changes in foreign exchange rates.
Operating margin of 54% increased 200 basis points year over year.
The Nasdaq witnessed 275 IPOs in the first quarter, representing $ 74 billion in capital raised, including 79 IPOs of operating companies as well as 196 IPOs of special purpose acquisition companies. During the quarter under review, the Nasdaq welcomed 319 new listings.
Market Services net revenues increased 20% from the last year quarter to $ 338 million. This increase is largely due to higher revenues from trading and clearing equity derivatives, spot trading in equities, trading and clearing fixed income securities and commodities. raw materials and operations management services.
Business Services revenues increased 21% year-over-year to $ 155 million, driven by higher listing services revenues as well as higher IR and ESG revenues.
Investment Intelligence revenue increased 22% year over year to $ 258 million. Rising revenues from market data, indexes and analysis led to the rise.
Market Technology revenue increased 23% year-over-year to $ 100 million, largely due to increased revenue from Market Infrastructure Technology as well as Market Technology. fight against financial crime.
The Nasdaq had cash and cash equivalents of $ 774 million as of March 31, 2021, down more than three times from the end of 2020 level. Long-term debt fell 1.6% from 2019 end level at $ 5.5 billion as of March 31, 2021.
The Nasdaq brought in $ 243 million in the first quarter of 2021, including $ 162 million in share buybacks.
As of March 31, 2021, the Nasdaq had $ 248 million remaining under its share buyback authorization.
The board of directors approved a 10% increase in the quarterly dividend to 54 cents per share. The dividend is payable on June 25, 2021 to shareholders of record on June 11, 2021.
Nasdaq provided non-GAAP operating expense forecast for 2021 in the range of $ 1.5 billion to $ 1.62 billion, revised from $ 1.55 billion to $ 1.62 billion. dollars earlier.
The non-GAAP tax rate is still estimated to be between 25% and 27% in 2021.
How have the estimates evolved since then?
As it turns out, new estimates have trended upward over the past month.
Currently, the Nasdaq has an average growth score of C, although it lags significantly on the Momentum Score front with an F. Following the exact same price, the stock was given an F rating. on the value side, which places it in the fifth. quintile for this investment strategy.
Overall, the stock has an overall VGM score of F. If you’re not strategy-focused, this score is the one you should be interested in.
Estimates tend to increase overall for the stock, and the magnitude of these revisions looks promising. It is hardly surprising that the Nasdaq has a Zacks Rank # 2 (Buy). We expect an above-average return for the stock over the next few months.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.