Key Takeaways
- Nasdaq shares jumped 7% today after third-quarter non-GAAP EPS of $1.04 and net revenue of $1.48 billion beat analysts’ estimates.
- Nasdaq’s growth now comes from its software, data and index businesses, which grew 17% and made up nearly 80% of net revenue, while trading revenue grew 2%.
- Index revenue rose 39% on a record $49 billion of quarterly net inflows, though that business still rises and falls with the market.
- Analysts expect normalized EPS to climb from $3.48 in 2025 to $5.30 in 2028, and the stock’s forward P/E sits only slightly above its 10-year average.
Nasdaq (NDAQ) shares jumped 7%, on a down day for the broader market, after its third-quarter results beat Wall Street’s estimates before the open.
Chair and CEO Adena Friedman said the quarter “demonstrates the strength and momentum of our business.” Hard to argue with that.
What exactly happened
Nasdaq beat on both lines:
- Net revenue of $1.48 billion, up 13% from a year ago, against $1.46 billion expected
- Non-GAAP EPS of $1.04, up 18%, against $1.02 expected
- Index revenue of $286 million, up 39%, on a record $49 billion of net inflows in the quarter
- ARR of $3.4 billion, up 12%, with FinTech ARR growth at a record 18%
The exchange is the slow part
Most of that growth came from outside the trading business. Solutions revenue (index, data, listings and financial software) grew 17% to $1.17 billion, nearly 80% of net revenue. Market Services, the trading side, grew just 2% to $309 million.
Capital Access Platforms, home of the index business, grew 20%, and FinTech grew 16% to $529 million.
Earnings have picked up with it. Normalized EPS sat at $2.82 in both 2023 and 2024, rose to $3.48 in 2025, and analysts expect $5.30 by 2028…
Nasdaq has earned $3.07 a share through September. That leaves about $1.05 to earn in the fourth quarter to hit this year’s $4.12 estimate, which is roughly what it just made. So that number looks well within reach.
TIKR tracks 18 analysts on Nasdaq. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Nasdaq, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Nasdaq’s Analyst Ratings
Not much of a software premium
Yet for all that growth, the stock doesn’t carry much of a premium. At Wednesday’s close, Nasdaq traded at 22x forward earnings. That’s a touch above its 10-year average of 21x and well below its 29x peak in October 2021…
After today’s jump, it’s closer to 23x.
Plus, the listings side has more coming. Nasdaq won 8 of the quarter’s 10 largest operating-company IPOs. And Anthropic is expected to be its next blockbuster listing after SpaceX, The Wall Street Journal reported.
My take: Most of Nasdaq’s revenue now comes from software, data and index fees growing 17%, so 23x forward earnings is a fair price. I think the re-rating has further to go.
Of course, index revenue rides on the market itself. ETP assets tracking Nasdaq’s indexes hit a record $1.16 trillion. But $190 billion of the past year’s gain came from rising prices, and that reverses when markets fall.
So what is Nasdaq stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Nasdaq could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
