Company Reports

Wide-moat-rated Intercontinental Exchange reported strong first-quarter results that were in line with our expectations as it benefited from continued strength in energy futures trading. Net revenue increased 21%, or 5% pro forma for the acquisition of Black Knight, to $2.3 billion. Diluted earnings per share increased 14% to $1.33. As we incorporate these results, we do not plan to materially alter our $140 fair value estimate. We see the shares as modestly undervalued at the current price.

Intercontinental Exchange has continued to diversify its revenue streams by using a series of acquisitions to build its position in mortgage technology and fixed-income data. Roughly half of ICE’s revenue is recurring, reducing reliance on exchange fees, which is a positive given the competition facing its equity trading business.

Wide-moat-rated Intercontinental Exchange reported decent fourth-quarter earnings that were in line with our expectations. Net revenue increased 24% from last year to $2.2 billion, or 7% when adjusted for the firm's acquisition of Black Knight. Meanwhile, net income fell 11.4% to $390 million, mostly due to acquisition-related expenses. As we incorporate these results, we do not plan to materially alter our $136 per share fair value estimate.

While the core exchange business remains highly attractive, generating substantial cash flow while requiring minimal incremental capital, the industry is mature and faces limited growth prospects. This is particularly true for U.S. equity and options exchanges, as increased competition and regulatory pressure further reduce growth potential for trading and market data revenue. Additionally, antitrust considerations leave little room for further industry consolidation.

Intercontinental Exchange has continued to diversify its revenue streams by using a series of acquisitions to build its position in mortgage technology and fixed-income data. Roughly half of ICE’s revenue is recurring, reducing reliance on exchange fees, which is a positive given the competition facing its equity trading business.

Wide-moat-rated Intercontinental Exchange reported decent third-quarter earnings that were in line with our expectations. Net revenue increased 9% from last year and 6% from last quarter to $2 billion. Meanwhile, operating income fell 7% to $845 million, mostly due to $155 million in integration costs from the closing of the Black Knight acquisition. As we incorporate these results, we do not plan to materially alter our $137 fair value estimate for Intercontinental Exchange. We see the shares as undervalued at current prices.

Intercontinental Exchange has continued to diversify its revenue streams by using a series of acquisitions to build its position in mortgage technology and fixed-income data. Roughly half of ICE’s revenue is recurring, reducing reliance on exchange fees, which is a positive given the competition facing its equity trading business.

Nearly a year and a half after the initial announcement, wide-moat-rated Intercontinental Exchange has completed its acquisition of Black Knight, a firm that offers data and software services for the real estate and mortgage industries. In general, we like the underlying strategy of the deal as Black Knight’s data assets will help drive Intercontinental’s broader vision of a fully electronic mortgage lending process and a more efficient mortgage bond market, while Intercontinental's mortgage technology business will benefit from reduced cyclicality as Black Knight’s dominant mortgage servicing software business will add reliable recurring revenue. That said, we believe the attractiveness of the deal has been negatively impacted by the steps Intercontinental had to take to get the deal approved by the Federal Trade Commission.

Wide-moat Intercontinental Exchange reported solid second-quarter earnings as strong trading revenue offset continued weakness in the mortgage technology business. Net revenue increased 4% from last year to $1.9 billion. Intercontinental's bottom-line results benefited from strong cost management and an unusually low tax expense, with net income rising 44% year over year to $799 million. While these were good results, they were driven by high futures trading volume in the firm’s exchange segment, and volume can vary significantly from quarter to quarter based on market conditions. As we incorporate these results, we do not plan to alter our $136 fair value estimate for Intercontinental Exchange.

Intercontinental Exchange has continued to diversify its revenue streams by using a series of acquisitions to build its position in mortgage technology and fixed-income data. Roughly half of ICE’s revenue is recurring, reducing reliance on exchange fees, which is a positive given the competition facing its equity trading business.

Wide-moat Intercontinental Exchange reported decent earnings as volatile markets drove strong trading volume and its fixed-income execution and credit default swap businesses showed improved results. The company reported net revenue of $1.9 billion, effectively flat from a strong quarter last year and up 7.2% sequentially. EPS was also flat year over year and up 54% from last quarter at $1.17. As we incorporate these results, we do not plan to materially alter our $131 fair value estimate.

Intercontinental Exchange has continued to diversify its revenue streams by using a series acquisitions to build its position in mortgage technology and fixed-income data. Roughly half of ICE’s revenue is recurring, reducing the company’s reliance on exchange fees, a positive given the amount of competition facing its equity trading business.

Wide-moat-rated Intercontinental Exchange reported decent fourth-quarter results that were largely in line with our expectations. The firm's net revenue fell 3.9% year over year to $1.77 billion, while earnings per share dropped 6.7% from last year to $1.25. The decrease in bottom-line and top-line results can be largely traced to the firm’s energy futures revenue and its mortgage technology business, which was impacted by lower mortgage origination volume industrywide. On a more positive note, the decrease in revenue was entirely from transactional sources, with the firm’s more reliable recurring revenue increasing 4% to $940 million. As we incorporate these results, we are maintaining our $130 fair value estimate.

The North American exchanges have undergone substantial changes in recent years, as regulatory changes, sharp shifts in market conditions, and Intercontinental Exchange and Nasdaq’s continued efforts to reposition their firms as diversified technology companies have kept the group in flux. The exchanges have enjoyed substantial tailwinds over the last couple of years as their core trading and listing operations benefited from cyclical highs in equity market volatility and IPO activity, with futures and options volume far above prepandemic levels. We do expect these tailwinds to fade and project more normalized rates of growth going forward, but, in our view, recent market activity has left shares of some exchanges oversold and we see opportunity for investors in the industry group.

Intercontinental Exchange has continued to diversify its revenue streams by using a series acquisitions to build its position in mortgage technology and fixed-income data. Roughly half of ICE’s revenue is recurring, reducing the company’s reliance on exchange fees, a positive given the amount of competition facing its equity trading business.

Wide-moat-rated Intercontinental Exchange reported decent third-quarter earnings as strength in its exchange and fixed income businesses was offset by weakness in its mortgage technology segment, which remains under pressure from low mortgage origination volume. Intercontinental’s net revenue in the quarter was up 3% from last year, though effectively flat from last quarter at $1.8 billion. As we incorporate these results, we do not plan to materially alter our $130 fair value estimate.

Wide-moat Intercontinental Exchange reported solid second-quarter earnings that were in line with our expectations, as weakness in its mortgage technology segment was offset by strength in its exchange and fixed-income data businesses. Intercontinental reported net revenue of $1.81 billion, which was up 8% from last year but down 4.5% from last quarter. Intercontinental Exchange also saw its EPS rise 14% year over year to $1.32. As we incorporate these results, we do not plan to alter our $130 fair value estimate.

Intercontinental Exchange has continued to diversify its revenue streams by using a series acquisitions to build its position in mortgage technology and fixed-income data. Roughly half of ICE’s revenue is recurring, reducing the company’s reliance on exchange fees, a positive given the amount of competition facing its equity trading business.

Wide-moat-rated Intercontinental Exchange reported solid first-quarter earnings with strong trading volume on the company’s exchanges, partially offset by lower revenue from its mortgage technology segment, a consequence of lower mortgage origination volume nationwide. ICE reported net revenue of $1.9 billion, a 6% increase from last year, while adjusted earnings per share increased 7% year over year to $1.43.

Intercontinental Exchange has continued to diversify its revenue streams by using a series acquisitions to build its position in mortgage technology and fixed-income data. Roughly half of ICE’s revenue is recurring, reducing the company’s reliance on exchange fees, a positive given the amount of competition facing its equity trading business.