Nasdaq-NDAQ Stock Trades Below 50-Day SMA: What Should You Do Now?

Core Viewpoint - Nasdaq (NDAQ) is currently experiencing a short-term bearish trend, trading below its 50-day simple moving average, with a share price of $68.25, down 18.9% from its 52-week high of$ 84.15 [1] Company Overview - Nasdaq has a market capitalization of $39.2 billion and is a leading provider of trading, clearing, marketplace technology, regulatory, securities listing, and public and private company services [2] - The company has maintained a free cash flow conversion of over 100% in recent quarters, indicating solid earnings [2] Financial Performance - Year-to-date, Nasdaq has lost 11.7%, underperforming its industry and sector but outperforming the Zacks S&P 500 composite [6] - Nasdaq shares are trading at a price-to-earnings ratio of 20.62X, which is lower than the industry average of 22.53X, suggesting that shares are relatively cheap [9] - The Zacks average price target for Nasdaq is$ 90.67 per share, indicating a potential upside of 22.8% from the last closing price [11] Earnings Projections - The Zacks Consensus Estimate for 2025 earnings is $3.20 per share, reflecting a 13.5% year-over-year increase, with revenues expected to rise by 8.3% to$ 5 billion [12] - For 2026, the earnings per share estimate is $3.62, indicating a 13.3% year-over-year increase on revenues of$ 5.4 billion, with a long-term earnings growth rate projected at 12.5% [12] Growth Strategy - Nasdaq's growth strategy focuses on increasing revenues from high-growth Market Technology and Investment Intelligence segments, along with R&D spending on higher-growth products [17] - The company anticipates strong growth in its index and analytics businesses, with medium-term revenue growth estimates of 5-8% for Capital Access Platforms and 10-14% for Financial Technology [18] Inorganic Growth and Market Position - Nasdaq has made strategic acquisitions to enhance its technology offerings and market surveillance capabilities, particularly in the anti-financial crime space, which has a total addressable market of $12.5 billion [21] - The company aims to achieve 40-50% of its revenues from SaaS by this year [21] Expense Management - Nasdaq expects non-GAAP operating expense growth of 5-8% over the medium term, with estimated pretax charges of$ 115- $145 million, of which 40% will be non-cash [22] - The company anticipates annual run rate operating efficiencies and revenue synergies of at least$ 30 million by 2025 [22] Dividend Policy - Nasdaq has a strong dividend history, with plans to maintain steady increases and achieve a dividend payout ratio of 35-38% by 2027 [23]