NDAQ – Markets are pricing in expectations for Uniform ROA to expand, and management is confident about their growth opportunities and product offerings

February 23, 2022

  • Nasdaq, Inc. (NDAQ) currently trades near corporate but above historical averages relative to Uniform earnings, with a 24.1x Uniform P/E (Fwd. V/E’).
  • At these levels, markets are pricing in expectations for Uniform ROA to expand to 46%, accompanied by 3% Uniform asset growth.
  • Meanwhile, analysts expect Uniform ROA to improve to 40% in 2022, albeit with weaker 25% Uniform asset shrinkage.
  • If sustained going forward, these levels would imply a stock price closer to $14, representing significant potential equity downside for the firm. That said, the firm is unlikely to shrink its balance sheet at this rate going forward.
  • Moreover, the firm’s most recent earnings call suggests management is confident about their growth opportunities and product offerings.

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