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Nasdaq Inc NDAQ

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Morningstar’s Analysis

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Economic Moat


Capital Allocation


Nasdaq Is Growing Recurring Revenue at a Healthy Pace, While Transactional Revenue Is Uncertain

Michael Wong, CFA, CPA Sector Director

Analyst Note

| Michael Wong, CFA, CPA |

Narrow-moat Nasdaq reported record full-year and fourth-quarter net revenue with fairly steady growth in its recurring and SaaS revenue. The company reported earnings per diluted share of $5.59 for the full year on net revenue of $2.9 billion. Net revenue increased 14.5% from the previous year with much of the double-digit growth due to strong trading volumes in market services and growth in assets under management-based (AUM) index revenue. We don’t anticipate making a significant change to our $100 fair value estimate for Nasdaq.

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Company Profile

Business Description

Nasdaq is primarily known for its equity exchange, but in addition to its market services business (about 35% of sales), the company sells and distributes exchange data through its information services segment (30%). Information services offers Nasdaq-branded indexes to asset managers and investors. Nasdaq's corporate services business (20%) offers listing services and related investor relations products to publicly traded companies. Through the company's market technology group (15%), Nasdaq facilitates the exchange operations of other exchanges throughout the world and provides financial compliance services.

151 W. 42nd Street
New York, NY, 10036
T +1 212 401-8700
Sector Financial Services
Industry Financial Data & Stock Exchanges
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 4,830