Intercontinental Exchange (ICE): Assessing Valuation After Strong November Volumes and New Contract Wins

Intercontinental Exchange (ICE) just strung together a trio of positive updates, with stronger November trading volumes, record open interest across key contracts, and extensions of major client relationships that reinforce its market infrastructure role.

See our latest analysis for Intercontinental Exchange.

Those operational wins are feeding into sentiment, with the latest $157.82 share price sitting above its start of year level and a strong three year total shareholder return suggesting underlying momentum is still intact even after recent volatility.

If you like the structural tailwinds behind market infrastructure, it could be a smart moment to see which other fast growing stocks with high insider ownership are starting to build similar long term narratives.

With the shares up modestly over the past year but still trading at roughly a 20 percent discount to analyst targets, is ICE quietly undervalued right now, or are markets already pricing in its next leg of growth?

Most Popular Narrative: 17.8% Undervalued

With Intercontinental Exchange closing at $157.82 against a narrative fair value near $192, the story leans toward upside and hinges on how its platforms scale.

The continued expansion and integration of ICE's global electronic trading platforms across asset classes, including record energy, interest rate, and equity contract volumes, suggests ongoing benefits from digitization and greater market electronification, which are likely to drive sustained double-digit growth in transaction revenues and operating leverage.

Read the complete narrative.

Want to see what powers that optimism? The narrative leans on rising margins, accelerating earnings, and a valuation multiple usually reserved for faster growing franchises. Curious?

Result: Fair Value of $191.93 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the story could unravel if energy volumes weaken or mortgage tech integration stumbles, which could pressure both transaction growth and margin expansion assumptions.

Find out about the key risks to this Intercontinental Exchange narrative.

Another View: SWS DCF Puts ICE in the Expensive Camp

Our DCF model paints a cooler picture, suggesting fair value closer to $103.20, well below the current $157.82 share price and implying ICE may be overvalued on cash flow terms. If growth or margins disappoint even slightly, that could raise questions about how much downside room remains.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Intercontinental Exchange for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 906 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Intercontinental Exchange Narrative

If you see the story differently or want to dig into the numbers yourself, you can craft a personalized narrative in just minutes: Do it your way.

A great starting point for your Intercontinental Exchange research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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