Intrinsic value of Nasdaq - NDAQ

Previous Close

$72.74

  Intrinsic Value

$91.88

stock screener

  Rating & Target

buy

+26%

  Value-price divergence*

+25%

Previous close

$72.74

 
Intrinsic value

$91.88

 
Up/down potential

+26%

 
Rating

buy

 
Value-price divergence*

+25%

Our model is not good at valuating stocks of financial companies, such as NDAQ.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of NDAQ stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 12.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  8.87
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.35
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.17
  5.15
  5.13
  5.12
  5.11
Revenue, $m
  3,705
  3,975
  4,257
  4,549
  4,852
  5,168
  5,497
  5,839
  6,195
  6,566
  6,953
  7,356
  7,777
  8,217
  8,675
  9,155
  9,656
  10,180
  10,728
  11,301
  11,902
  12,530
  13,188
  13,877
  14,599
  15,356
  16,149
  16,981
  17,853
  18,767
  19,725
Variable operating expenses, $m
 
  3,089
  3,264
  3,447
  3,637
  3,835
  4,040
  4,254
  4,477
  4,709
  4,951
  4,600
  4,863
  5,138
  5,425
  5,725
  6,038
  6,366
  6,708
  7,067
  7,442
  7,835
  8,247
  8,678
  9,129
  9,603
  10,099
  10,619
  11,164
  11,735
  12,335
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,444
  3,089
  3,264
  3,447
  3,637
  3,835
  4,040
  4,254
  4,477
  4,709
  4,951
  4,600
  4,863
  5,138
  5,425
  5,725
  6,038
  6,366
  6,708
  7,067
  7,442
  7,835
  8,247
  8,678
  9,129
  9,603
  10,099
  10,619
  11,164
  11,735
  12,335
Operating income, $m
  261
  887
  992
  1,102
  1,215
  1,334
  1,457
  1,585
  1,718
  1,857
  2,002
  2,756
  2,914
  3,079
  3,250
  3,430
  3,618
  3,814
  4,019
  4,234
  4,459
  4,695
  4,941
  5,199
  5,470
  5,754
  6,051
  6,362
  6,689
  7,031
  7,391
EBITDA, $m
  431
  1,568
  1,679
  1,795
  1,914
  2,039
  2,169
  2,304
  2,444
  2,591
  2,743
  2,902
  3,068
  3,242
  3,423
  3,612
  3,810
  4,016
  4,233
  4,459
  4,696
  4,944
  5,203
  5,475
  5,760
  6,059
  6,372
  6,700
  7,044
  7,404
  7,782
Interest expense (income), $m
  119
  144
  170
  197
  224
  253
  283
  314
  346
  380
  415
  451
  489
  529
  570
  613
  659
  706
  755
  807
  861
  918
  977
  1,039
  1,104
  1,172
  1,244
  1,318
  1,397
  1,479
  1,565
Earnings before tax, $m
  136
  743
  822
  905
  991
  1,081
  1,174
  1,271
  1,372
  1,478
  1,588
  2,305
  2,425
  2,550
  2,680
  2,817
  2,959
  3,108
  3,264
  3,427
  3,598
  3,777
  3,964
  4,160
  4,366
  4,581
  4,807
  5,044
  5,292
  5,552
  5,825
Tax expense, $m
  28
  201
  222
  244
  268
  292
  317
  343
  371
  399
  429
  622
  655
  688
  724
  760
  799
  839
  881
  925
  971
  1,020
  1,070
  1,123
  1,179
  1,237
  1,298
  1,362
  1,429
  1,499
  1,573
Net income, $m
  108
  542
  600
  661
  723
  789
  857
  928
  1,002
  1,079
  1,159
  1,683
  1,770
  1,861
  1,957
  2,056
  2,160
  2,269
  2,383
  2,502
  2,627
  2,757
  2,894
  3,037
  3,187
  3,344
  3,509
  3,682
  3,863
  4,053
  4,253

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  648
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  14,150
  14,509
  15,535
  16,601
  17,709
  18,862
  20,061
  21,310
  22,609
  23,964
  25,376
  26,848
  28,384
  29,988
  31,662
  33,412
  35,241
  37,153
  39,153
  41,246
  43,436
  45,730
  48,131
  50,647
  53,282
  56,044
  58,939
  61,974
  65,155
  68,491
  71,990
Adjusted assets (=assets-cash), $m
  13,502
  14,509
  15,535
  16,601
  17,709
  18,862
  20,061
  21,310
  22,609
  23,964
  25,376
  26,848
  28,384
  29,988
  31,662
  33,412
  35,241
  37,153
  39,153
  41,246
  43,436
  45,730
  48,131
  50,647
  53,282
  56,044
  58,939
  61,974
  65,155
  68,491
  71,990
Revenue / Adjusted assets
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
  0.274
Average production assets, $m
  2,208
  2,369
  2,537
  2,711
  2,892
  3,080
  3,276
  3,480
  3,692
  3,913
  4,144
  4,384
  4,635
  4,897
  5,171
  5,456
  5,755
  6,067
  6,394
  6,736
  7,093
  7,468
  7,860
  8,271
  8,701
  9,152
  9,625
  10,121
  10,640
  11,185
  11,756
Working capital, $m
  478
  -183
  -196
  -209
  -223
  -238
  -253
  -269
  -285
  -302
  -320
  -338
  -358
  -378
  -399
  -421
  -444
  -468
  -493
  -520
  -547
  -576
  -607
  -638
  -672
  -706
  -743
  -781
  -821
  -863
  -907
Total debt, $m
  3,603
  4,256
  4,918
  5,607
  6,323
  7,068
  7,843
  8,649
  9,489
  10,364
  11,276
  12,227
  13,219
  14,255
  15,337
  16,467
  17,649
  18,884
  20,176
  21,528
  22,943
  24,424
  25,976
  27,601
  29,303
  31,088
  32,958
  34,918
  36,973
  39,128
  41,389
Total liabilities, $m
  8,720
  9,373
  10,035
  10,724
  11,440
  12,185
  12,960
  13,766
  14,606
  15,481
  16,393
  17,344
  18,336
  19,372
  20,454
  21,584
  22,766
  24,001
  25,293
  26,645
  28,060
  29,541
  31,093
  32,718
  34,420
  36,205
  38,075
  40,035
  42,090
  44,245
  46,506
Total equity, $m
  5,430
  5,136
  5,499
  5,877
  6,269
  6,677
  7,102
  7,544
  8,004
  8,483
  8,983
  9,504
  10,048
  10,616
  11,208
  11,828
  12,475
  13,152
  13,860
  14,601
  15,377
  16,188
  17,038
  17,929
  18,862
  19,840
  20,864
  21,939
  23,065
  24,246
  25,485
Total liabilities and equity, $m
  14,150
  14,509
  15,534
  16,601
  17,709
  18,862
  20,062
  21,310
  22,610
  23,964
  25,376
  26,848
  28,384
  29,988
  31,662
  33,412
  35,241
  37,153
  39,153
  41,246
  43,437
  45,729
  48,131
  50,647
  53,282
  56,045
  58,939
  61,974
  65,155
  68,491
  71,991
Debt-to-equity ratio
  0.664
  0.830
  0.890
  0.950
  1.010
  1.060
  1.100
  1.150
  1.190
  1.220
  1.260
  1.290
  1.320
  1.340
  1.370
  1.390
  1.410
  1.440
  1.460
  1.470
  1.490
  1.510
  1.520
  1.540
  1.550
  1.570
  1.580
  1.590
  1.600
  1.610
  1.620
Adjusted equity ratio
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  108
  542
  600
  661
  723
  789
  857
  928
  1,002
  1,079
  1,159
  1,683
  1,770
  1,861
  1,957
  2,056
  2,160
  2,269
  2,383
  2,502
  2,627
  2,757
  2,894
  3,037
  3,187
  3,344
  3,509
  3,682
  3,863
  4,053
  4,253
Depreciation, amort., depletion, $m
  170
  682
  687
  693
  699
  705
  712
  719
  726
  733
  741
  146
  155
  163
  172
  182
  192
  202
  213
  225
  236
  249
  262
  276
  290
  305
  321
  337
  355
  373
  392
Funds from operations, $m
  677
  1,224
  1,287
  1,354
  1,423
  1,494
  1,569
  1,647
  1,728
  1,812
  1,900
  1,829
  1,925
  2,025
  2,129
  2,238
  2,352
  2,471
  2,596
  2,726
  2,863
  3,006
  3,156
  3,313
  3,477
  3,649
  3,830
  4,019
  4,218
  4,426
  4,644
Change in working capital, $m
  -45
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
Cash from operations, $m
  722
  1,236
  1,300
  1,367
  1,437
  1,509
  1,584
  1,662
  1,744
  1,829
  1,918
  1,847
  1,944
  2,045
  2,150
  2,260
  2,375
  2,495
  2,621
  2,753
  2,891
  3,035
  3,186
  3,344
  3,510
  3,684
  3,867
  4,058
  4,258
  4,468
  4,689
Maintenance CAPEX, $m
  0
  -74
  -79
  -85
  -90
  -96
  -103
  -109
  -116
  -123
  -130
  -138
  -146
  -155
  -163
  -172
  -182
  -192
  -202
  -213
  -225
  -236
  -249
  -262
  -276
  -290
  -305
  -321
  -337
  -355
  -373
New CAPEX, $m
  -134
  -162
  -168
  -174
  -181
  -188
  -196
  -204
  -212
  -221
  -231
  -240
  -251
  -262
  -273
  -286
  -299
  -312
  -327
  -342
  -358
  -375
  -392
  -411
  -430
  -451
  -473
  -496
  -520
  -545
  -571
Cash from investing activities, $m
  -1,657
  -236
  -247
  -259
  -271
  -284
  -299
  -313
  -328
  -344
  -361
  -378
  -397
  -417
  -436
  -458
  -481
  -504
  -529
  -555
  -583
  -611
  -641
  -673
  -706
  -741
  -778
  -817
  -857
  -900
  -944
Free cash flow, $m
  -935
  1,001
  1,054
  1,108
  1,165
  1,224
  1,286
  1,349
  1,416
  1,485
  1,557
  1,469
  1,547
  1,628
  1,713
  1,802
  1,895
  1,991
  2,092
  2,198
  2,308
  2,424
  2,545
  2,672
  2,804
  2,943
  3,089
  3,241
  3,401
  3,569
  3,744
Issuance/(repayment) of debt, $m
  2,456
  653
  663
  689
  716
  745
  775
  806
  840
  875
  912
  951
  992
  1,036
  1,082
  1,130
  1,181
  1,235
  1,292
  1,352
  1,415
  1,481
  1,551
  1,625
  1,703
  1,784
  1,870
  1,960
  2,055
  2,155
  2,260
Issuance/(repurchase) of shares, $m
  -100
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,202
  653
  663
  689
  716
  745
  775
  806
  840
  875
  912
  951
  992
  1,036
  1,082
  1,130
  1,181
  1,235
  1,292
  1,352
  1,415
  1,481
  1,551
  1,625
  1,703
  1,784
  1,870
  1,960
  2,055
  2,155
  2,260
Total cash flow (excl. dividends), $m
  261
  1,654
  1,716
  1,797
  1,881
  1,969
  2,060
  2,156
  2,255
  2,360
  2,469
  2,420
  2,539
  2,664
  2,795
  2,932
  3,076
  3,227
  3,384
  3,550
  3,723
  3,905
  4,096
  4,297
  4,507
  4,727
  4,959
  5,202
  5,456
  5,724
  6,005
Retained Cash Flow (-), $m
  179
  -354
  -363
  -377
  -392
  -408
  -425
  -442
  -460
  -479
  -500
  -521
  -544
  -568
  -593
  -619
  -647
  -677
  -708
  -741
  -775
  -812
  -850
  -891
  -933
  -978
  -1,025
  -1,074
  -1,126
  -1,181
  -1,239
Prev. year cash balance distribution, $m
 
  648
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,947
  1,353
  1,420
  1,489
  1,561
  1,636
  1,714
  1,795
  1,880
  1,969
  1,899
  1,996
  2,097
  2,202
  2,313
  2,429
  2,550
  2,676
  2,809
  2,948
  3,094
  3,246
  3,406
  3,574
  3,750
  3,934
  4,127
  4,330
  4,543
  4,766
Discount rate, %
 
  6.30
  6.62
  6.95
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.78
  11.31
  11.88
  12.47
  13.10
  13.75
  14.44
  15.16
  15.92
  16.72
  17.55
  18.43
  19.35
  20.32
  21.33
  22.40
  23.52
  24.70
  25.93
PV of cash for distribution, $m
 
  1,832
  1,190
  1,161
  1,123
  1,079
  1,028
  972
  910
  844
  775
  648
  584
  520
  457
  397
  339
  285
  236
  192
  154
  120
  93
  70
  51
  37
  26
  18
  12
  8
  5
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Nasdaq, Inc. provides trading, clearing, exchange technology, regulatory, securities listing, information, and public company services worldwide. It operates in four segments: Market Services, Listing Services, Information Services, and Technology Solutions. The Market Services segment offers equity derivative trading and clearing; cash equity trading; fixed income, currency, and commodities trading and clearing; and access and broker services. This segment operates various exchanges and other marketplace facilities across various asset classes, including derivatives, commodities, cash equity, debt, structured products, and exchange traded products; and provides clearing, settlement, and central depository services, as well as offers transaction-based platforms. The Listing Services segment operates various listing platforms, which offer capital raising solutions for private and public companies. Its primary listing markets include The NASDAQ Stock Market, and the Nasdaq Nordic and Nasdaq Baltic exchanges. The Information Services segment sells and distributes historical and real-time quote and trade information to market participants and data distributors; and develops and licenses Nasdaq branded indexes, associated derivatives, and financial products, as well as provides custom calculation services for third-party clients. The Technology Solutions segment offers corporate solutions in investor relations, public relations, multimedia solutions, and governance. It also provides technology solutions for trading, clearing, settlement, surveillance, and information dissemination; facility management and systems integration, and advisory services; and broker services, as well as enterprise governance, risk management, and compliance software and services. The company was formerly known as The NASDAQ OMX Group, Inc. and changed its name to Nasdaq, Inc. in September 2015. Nasdaq, Inc. was founded in 1971 and is headquartered in New York, New York.

FINANCIAL RATIOS  of  Nasdaq (NDAQ)

Valuation Ratios
P/E Ratio 112.2
Price to Sales 3.3
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 16.8
Price to Free Cash Flow 20.6
Growth Rates
Sales Growth Rate 8.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0.8%
Cap. Spend. - 3 Yr. Gr. Rate 3.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0.9
LT Debt to Equity 66.4%
Total Debt to Equity 66.4%
Interest Coverage 2
Management Effectiveness
Return On Assets 1.6%
Ret/ On Assets - 3 Yr. Avg. 3.2%
Return On Total Capital 1.3%
Ret/ On T. Cap. - 3 Yr. Avg. 3.8%
Return On Equity 2%
Return On Equity - 3 Yr. Avg. 5.5%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 61.5%
Gross Margin - 3 Yr. Avg. 60.6%
EBITDA Margin 11.5%
EBITDA Margin - 3 Yr. Avg. 20.4%
Operating Margin 7%
Oper. Margin - 3 Yr. Avg. 16.1%
Pre-Tax Margin 3.7%
Pre-Tax Margin - 3 Yr. Avg. 13.1%
Net Profit Margin 2.9%
Net Profit Margin - 3 Yr. Avg. 9.1%
Effective Tax Rate 20.6%
Eff/ Tax Rate - 3 Yr. Avg. 27.8%
Payout Ratio 185.2%

NDAQ stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NDAQ stock intrinsic value calculation we used $3705 million for the last fiscal year's total revenue generated by Nasdaq. The default revenue input number comes from 2016 income statement of Nasdaq. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NDAQ stock valuation model: a) initial revenue growth rate of 7.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.3%, whose default value for NDAQ is calculated based on our internal credit rating of Nasdaq, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Nasdaq.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NDAQ stock the variable cost ratio is equal to 78.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for NDAQ stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4% for Nasdaq.

Corporate tax rate of 27% is the nominal tax rate for Nasdaq. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NDAQ stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NDAQ are equal to 59.6%.

Life of production assets of 46.6 years is the average useful life of capital assets used in Nasdaq operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NDAQ is equal to -4.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5430 million for Nasdaq - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 165.143 million for Nasdaq is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Nasdaq at the current share price and the inputted number of shares is $12.0 billion.

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COMPANY NEWS

▶ Nasdaq beats Street 2Q forecasts   [Jul-26-17 12:34PM  Associated Press]
▶ Nasdaq Elects New Board Member   [07:26AM  GlobeNewswire]
▶ Nasdaq Elects New Board Member   [07:20AM  GlobeNewswire]
▶ PRESS DIGEST- Financial Times - July 26   [Jul-25-17 07:58PM  Reuters]
▶ Nasdaq to Acquire Sybenetix   [03:01AM  GlobeNewswire]
▶ [$$] Nasdaq: one size fits all   [08:17AM  Financial Times]
▶ Highest performing market over 20 years   [10:19AM  CNBC Videos]
▶ Are Short Sellers Really 'Icky And Un-American'?   [Jul-02-17 06:00PM  Benzinga]
Stock chart of NDAQ Financial statements of NDAQ Annual reports of NDAQ
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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