NDAQ: Higher Quality Solutions Revenue Will Drive Continued Share Upside Into 2026

Analysts have nudged their average price target for Nasdaq higher to the low $110s from the high $100s, citing accelerating, higher quality solutions revenue and a supportive macro backdrop that they expect will sustain or even quicken the company’s growth momentum into 2026.

Analyst Commentary

Street research in recent weeks has grown more constructive on Nasdaq, pointing to an improving earnings trajectory and a higher quality revenue mix that is reinforcing the stock's re-rating case.

Bullish Takeaways

• Bullish analysts see Nasdaq's solutions and financial technology businesses as the primary drivers of accelerating revenue growth, supporting a shift toward more recurring, higher margin streams that can justify a premium valuation multiple.
• Recent earnings beats, particularly in financial technology and index-related revenues, are viewed as evidence that execution on the post-acquisition technology strategy is tracking ahead of expectations and can sustain mid to high single digit top line growth with low teens earnings growth over the medium term.
• The macro backdrop and recovering capital markets environment are seen as catalysts for continued strength in Market Services and index products, which, combined with rising FinCrime revenue, could support upside to current growth and margin forecasts into 2026.
• Incremental price target increases across the Street into the low $100s are being framed as a response to improved visibility on revenue durability and operating leverage, suggesting that further upside remains if management continues to deliver on integration and growth targets.

Bearish Takeaways

• Bearish analysts caution that parts of the index business have shown softer revenue trends at times, introducing some execution risk to Nasdaq's ambition to maintain a consistently accelerating growth profile.
• Some price target changes have been marginal or even slightly lower, reflecting concerns that exchanges as a group may already discount a constructive rate and volume environment, limiting near term multiple expansion potential.
• The integration of recent technology acquisitions and the scaling of FinCrime and other solutions are seen as complex undertakings; missteps could pressure margins and delay the realization of the higher quality revenue mix that underpins the bullish valuation case.

What's in the News

• Nasdaq CEO Adena Friedman is among a select group of Wall Street leaders invited to a White House dinner with President Donald Trump, underscoring the exchange operator's high level of political and industry influence (New York Post)
• Nasdaq temporarily halted trading in Apollomics shares and warrants on September 17 pending additional information from the company, highlighting its regulatory oversight role in maintaining orderly markets
• LSEG and Nasdaq announced a strategic data partnership to distribute Nasdaq eVestment private markets intelligence through LSEG Workspace and Datafeeds, expanding Nasdaq's footprint in institutional private markets data
• Nasdaq unveiled new AI powered enhancements to its market surveillance platform that significantly improve detection of sophisticated market abuse schemes, including identifying 80% of pump and dump cases in a pilot
• Nasdaq expanded its strategic cloud partnership with Amazon Web Services to offer the Nasdaq Calypso capital markets and treasury platform as a fully managed service on AWS, aiming to modernize trading and risk infrastructure for global financial institutions

Valuation Changes

• Fair Value Estimate: Unchanged at approximately $103.13 per share, indicating a stable intrinsic value assessment.
• Discount Rate: Risen slightly from 8.54% to about 8.61%, reflecting a modest increase in the required return or perceived risk profile.
• Revenue Growth: Improved marginally, with the modeled long term contraction easing from approximately 8.53% to 8.53% year over year.
• Net Profit Margin: Edged down very slightly from about 33.58% to 33.58%, implying a virtually unchanged long term profitability outlook.
• Future P/E: Increased slightly from roughly 35.05x to 35.12x, suggesting a modestly higher valuation multiple on forward earnings.