NDAQ - Embedded Expectations Analysis - 2018 09 18
Nasdaq, Inc. (NDAQ:USA) currently trades above recent averages relative to UAFRS-based (Uniform) Earnings, with an 18.5x Uniform P/E. At these levels, the market has somewhat bullish expectations for the firm, and management is confident about the performance of their Information Services Segment, and their ability to take advantage of growth opportunitiesSpecifically, management generated an excitement marker when discussing the significant revenue increase in their Information Services segment. Additionally, management is confident in their ability to shift more resources, people and capital to growth opportunities across the company, due to the sale of their Public Relations Solutions and Digital Media Services segments. Also, they are confident that their margins are being weighed down by their acquisition of eVestment, rather than underperforming operations
Nasdaq is a holding company. Nasdaq is a holding company. Through its subsidiaries, the company manages, operates and provides its products and services in business segments: Market Services, which includes equity derivative trading and clearing, cash equity trading, fixed income and commodities trading and clearing and trade management services businesses; Corporate Services, which includes listing services and corporate solutions businesses; Information Services, which includes market data, index, and investment data and analytics; and Market Technology, which provides and delivers solutions across the trade lifecycle via the Nasdaq Financial Framework.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
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