NDAQ - Embedded Expectations Analysis - 2019 01 30
Nasdaq, Inc. (NDAQ:USA) currently trades near recent averages relative toUAFRS-based (Uniform) Earnings, with a 17.8x Uniform P/E. At these levels, the market is pricing in expectations for Uniform ROA to remain flat, but management is confident about client-focused innovation, revenue growth from SMARTS, the potential of SIP and Cinnober, and risk solutions in Hong Kong
Specifically, management is confident about their commitment to innovate for the benefit of market participants, and is confident about contracted risk solutions in Hong Kong. Additionally, they are confident in their margins, revenue, and recovery rates within their clearing business, Cinnober's ROI potential, and the potential of SIP. Finally, they are confident in revenue growth related to the SMARTS trading surveillance system, and about their culture of execution and delivery for clients
and shareholders
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
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
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