Updated Aug 18 at 11:26am ET.
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Nasdaq has agreed to buy LeveL Markets, a firm that operates an alternative trading system. These systems, often called dark pools, allow big investment firms to trade large blocks of stock away from public exchanges to avoid moving the market price before their orders are finished.
This move fits into Nasdaq's broader shift toward becoming a technology partner for big banks and funds. By owning more of the plumbing where professional trading happens, the company can sell more of its data and software tools. It also created a new Digital Liquidity Networks group to manage these types of private trading venues, showing that it wants to move beyond just being a public stock exchange.
Source: GlobeNewsWire
Nasdaq released its monthly data sheet showing the total volume of stocks and options traded on its platforms during July. While the company is shifting its focus toward selling software, these monthly trading figures still provide a window into the health of its transaction business, which earns a small fee on every trade.
Source: GlobeNewsWire
Morgan Stanley raised its price target from $112 to $120 after the company reported strong second-quarter results. This reflects growing confidence in the company's shift toward being a software provider, where it earns steady fees for tools that help banks manage risk and follow regulations. The new target suggests the stock could rise about 25 percent from its current level.
Source: Morgan Stanley
Nasdaq delivered a strong second quarter, with net revenue rising 15 percent to $1.5 billion. The company earned $1.07 per share, which was better than the $0.98 analysts expected. This growth was driven by a 17 percent jump in its solutions business, which includes the high-margin software it sells to financial firms.
The quarter included two major milestones: the listing of SpaceX, the largest initial public offering in the history of the exchange, and its index business reaching over $1 trillion in assets under management. These results show the company is successfully moving beyond just being a stock exchange and becoming a steady, software-driven business.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Nasdaq has agreed to sell its Fund Secondaries business to Nasdaq Private Market (NPM), an independent company that Nasdaq still holds a stake in. This unit helps investors buy and sell stakes in private investment funds. The move allows Nasdaq to simplify its operations while still benefiting from the growth of private market trading through its ownership in NPM.
Source: GlobeNewsWire
Analysts have recently issued a flurry of price target increases following the company's investor day. Most analysts are bullish, with 22 of 36 rating the stock a buy and an average target price that suggests 16% upside.
Management has cleared the analyst bar for eight straight quarters, often by a wide margin. This suggests they are consistently under-promising and over-delivering as the software business grows.
| Expectation | |
|---|---|
| EPS | $1.03 |
| Revenue | $1.47B |
