Nasdaq (NDAQ) To Report Q2 Earnings: What's In The Cards?

Nasdaq, Inc. NDAQ is slated to report second-quarter 2022 earnings on Jul 20, before the opening bell. The company delivered an earnings surprise in each of the last four quarters, the average being 5.9%.

Factors to Consider

Nasdaq's second-quarter performance is likely to have benefited from organic revenue growth, strong growth in index and analytics businesses and contributions from the acquisition of Verafin.

Non-trading revenues are expected to have benefited from the improved performance of Market Technology and continued strong growth of Market Data, Index and Analytics businesses.

The Zacks Consensus Estimate for Analytics businesses revenues is pegged at $56 million, indicating an increase of 12% from the year-ago reported figure. The consensus estimate for Index revenues is pegged at $126 million, suggesting growth of 17.7% from the year-ago reported figure.

Market Technology revenues are likely to have benefited from the higher anti-financial crime technology revenues owing to the inclusion of revenues from the acquisition of Verafin, new sales and strong retention, higher SaaS revenues as well as organic revenue growth. The Zacks Consensus Estimate for Market Technology revenues is pegged at $128 million, suggesting growth of 9.4% from the prior-year reported figure.

Market Services segment revenues are likely to have been driven by higher organic revenues, higher equity derivatives, cash equities, trade management services revenues, and strong operating leverage on higher trading revenues.

The Investment Intelligence segment is expected to have benefited from strong growth in index and analytics businesses as well as a positive contribution from Market Data. An increase in proprietary data revenues from higher international demand, higher licensing revenues from higher average AUM in ETPs linked to Nasdaq indexes and higher licensing revenues from futures trading linked to the Nasdaq-100 Index are likely to fuel this segment. Growth in the eVestment platform from new sales and strong retention are also expected to have added to the upside.

Organic growth, growth in the listed issuer base, higher U.S. listings revenues, expansion in listed U.S. corporate issuer base, higher adoption across the breadth of Investor Relations, as well as newer ESG advisory and reporting offerings are likely to have driven the Corporate Platforms segment.

Expenses are expected to have risen on higher organic growth and increase from the net impact of acquisitions and divestitures. The uptick is likely to have been partially offset by the lower impact of changes in foreign exchange rates.

The continued share buyback is anticipated to have provided an additional boost to the bottom line.

The Zacks Consensus Estimate for earnings stands at $1.93, indicating a 1.58% increase from the prior-year reported figure.

Q2 Volumes

Nasdaq reported mixed volumes for second-quarter 2022. U.S. equity options volume decreased 8.7% year over year to 714 million contracts. European options and futures volume increased 3.7% year over year to 16.6 million contracts.

Revenues per contract for U.S. equity options increased 8.2% year over year to 13 cents while the same for European options and futures decreased by a cent to 49 cents.

Under its cash equities, Nasdaq's U.S. matched equity volume in the second quarter grossed 139 billion shares, up 21.8% from the prior-year quarter. European equity volume decreased 17.3% year over year to $243 billion. Under fixed income commodities, European fixed income volume increased 2.7% to 7.5 million contracts.

In the second quarter, there were 5,064 listed companies on Nasdaq compared with 4,550 in the year-ago period. Total listings grew 11.3% year over year to 5,529.
The consensus estimate for listing revenues is pegged at $108 million, suggesting growth of 10.2% from the year-ago reported figure.

What Our Quantitative Model States

Our proven model does not conclusively predict an earnings beat for Nasdaq this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case as you can see below.

Earnings ESP: Nasdaq has an Earnings ESP of -1.39%. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Nasdaq, Inc. Price and EPS Surprise

Nasdaq, Inc. price-eps-surprise | Nasdaq, Inc. Quote

Zacks Rank: Nasdaq currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Here are some stocks from the finance sector with the perfect combination of elements to surpass estimates in their upcoming releases.

CME Group Inc. CME has an Earnings ESP of +0.90% and a Zacks Rank #3. The Zacks Consensus Estimate for the to-be-reported quarter implies a year-over-year increase of 15.2%

CME's earnings surpassed estimates in each of the last four quarters, the average beat being 3.2%. The Zacks Consensus Estimate for CME Group's 2022 earnings has moved 0.2% north in the past seven days.

American Express Company AXP has an Earnings ESP of +1.92% and a Zacks Rank #3. The Zacks Consensus Estimate for the to-be-reported quarter implies a year-over-year decrease of 15.4%.

AXP's earnings surpassed estimates in each of the last four quarters, the average beat being 33.2%. The Zacks Consensus Estimate for American Express's 2022 earnings has moved 0.1% north in the past seven days.

Ameris Bancorp ABCB has an Earnings ESP of +0.46 and a Zacks Rank #3. The Zacks Consensus Estimate for ABCB's 2022 earnings implies a year-over-year decrease of 4.8%.

Ameris Bancorp's earnings surpassed estimates in each of the last four quarters, the average beat being 1%. The Zacks Consensus Estimate for ABCB's 2022 earnings has moved 1.4% north in the past 30 days.
 
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