Electronic U.S. stock market exchange operator NASDAQ's (NASDAQ:NDAQ) stock has been collapsing with the benchmark indices as it has fallen (-22%) year-to-date. Not to be confused with the NASDAQ 100 exchange-traded-fund—Invesco QQQ Trust (NASDAQ:QQQ) which is composed of the weighted average value of its 100 underlying stocks, the NASDAQ is an operating business of itself.
However, the performance of the NDAQ tends to mirror the performance of the QQQ. The NASDAQ offers services and compliance tools outside of the listing services on its three exchanges including the NASDAQ, the Philadelphia, and the Boston exchanges.
It benefits most prominently from market trading volumes collecting fees on trades like a tollbooth. The markets are experiencing major volatility stemming from rising interest rates to combat significant inflation, supply chain and labor shortage as well as the Russian conflict in the Ukraine.
The uncertain landscape has slowed down client capital raising activities like IPOs. However, the Company benefits during uncertain market climates monitoring anti-financial crime solutions with recently acquired Verafin. Its ESG advisory and reporting solutions help corporations navigate the ESG environment.
The stock trades at 20X forward earnings providing a steady 1.54% dividend yield. Prudent investors seeking exposure in a major market index player can watch for opportunistic pullbacks in shares of NASDAQ.
Q1 Fiscal 2022 Earnings Release
On Apr. 20, 2022, NASDAQ released fiscal Q1 2022 results for the quarter ending in March 2022. The Company reported an earnings per share (EPS) profit of $1.97 versus $1.95 consensus analyst estimates, beating by $0.02.
Revenues rose 4.8% year-over-year (YoY) to $892 million, missing analyst estimates for $892.18 million. Net revenues reflected a $51 million positive impact from organic growth and $4 million increase from the net impact of acquisitions of Verafin minus (-$8 million) decrease from FX change rates.
The Company narrowed its fiscal 2022 non-GAAP operating expense guidance to a range between $1.7 billion and $1.76 billion and expects its non-GAAP tax rate in the range of 24% to 27%. The Company is also seeking a 3-for-1 stock split upon approval and raised its dividend to $0.60 per share.
Conference Call Takeaways
NASDAQ CEO Adena Friedman assured analysts the Company has minimal exposure to Russia and is highly engaged in the humanitarian efforts to support those in need.
She continued to stress that the markets are navigating through tumultuous times with rising interest rates, geopolitical stress, global supply chain disruptions impacting sentiment.
The negative sentiment has cut short capital raising activities like IPOs. The drop in index market cap was offset partially by strong futures volume and inflows into index products.
NASDAQ beefed up its anti-financial crime technology business with the acquisition of Verafin. She noted,
“By bringing together all of NASDAQ's anti-financial crime solutions, including Verafin and our market and trade surveillance solutions under Jamie King, the CEO and Co-Founder of Verafin, we have an incredible opportunity to maximize those cross-product synergies.
"We're excited to have Jamie as the new Executive Vice President of NASDAQ's ASC business as he leads the future of NASDAQ's high-impact, high-growth solutions that focus on fighting crime and ensuring the integrity of the financial industry.”
NDAQ Opportunistic Pullback Levels
Using the rifle charts on weekly and daily time frames provides a precision view of the landscape for NDAQ stock. The weekly rifle chart peaked near the $211.27 Fibonacci (fib) level.
Shares collapsed from there to bottom and coil off the $161.55 fib, until earnings sent shares right back down. The weekly rifle chart breakdown triggered on the inverse pup as stochastic crossed back down. The weekly 5-period moving average (MA) resistance is falling at $173.62 followed by the 15-period MA at $173.72.
The weekly lower Bollinger® Bands sit at $145.67. The weekly 200-period MA support sits at $128.40. The weekly 50-period MA resistance sits at $186.55. The weekly market structure low (MSL) buy triggers on a breakout above $173.73.
The daily rifle chart is in an active downtrend with a falling 5-period MA resistance at $161.66 followed by the 15-period MA at $172.17 and 50-period MA at $173.45. The daily lower BBs sit at $151.51.
The daily 200-period MA sits at $189.45 and daily upper BBs sit above at $198.03. The daily stochastic formed a full oscillation from the 90 back down through the 10-band as it stalls for a potential cross up or slip.
Prudent investors can look for opportunistic pullback levels at the $153.39 fib, $151.53 fib, $145.40 fib, $142.75, $137.64 fib, $131.04 fib, and the $125.24 fib level. Upside trajectories range from the $178.62 fib up towards the $199.15 fib level.