Nasdaq Sees Significant Rise in Short Interest; Analysts Respond

Nasdaq, Inc. (NASDAQ:NDAQ) experienced a notable increase in short interest as of December 15, 2023. The total short interest rose to 8,256,507 shares, marking a substantial increase of 27.9% from the previous month’s total of 6,457,376 shares. Given an average daily trading volume of 3,963,880 shares, this translates to a short-interest ratio of 2.1 days. Currently, approximately 1.5% of the company’s total shares are sold short.

Analyst Ratings and Market Reactions

In response to the rising short interest, several brokerages have adjusted their ratings for Nasdaq. On October 13, Raymond James Financial reiterated its “outperform” rating and raised its target price to $100.00, up from $99.00. Following suit, Morgan Stanley maintained an “overweight” rating, increasing its target price to $111.00 from $110.00 on December 22. Other firms, including Barclays, also revised their price targets, with Barclays increasing its estimate to $114.00, up from $109.00.

Overall, fourteen investment analysts currently rate the stock as a “Buy,” while three have assigned a “Hold” rating. According to data from MarketBeat.com, the consensus rating for Nasdaq stands at “Moderate Buy,” with an average price target of $101.40.

Institutional Investments and Stock Performance

Recent trading activity indicates that hedge funds are actively managing their positions in Nasdaq. For instance, Cary Street Partners Investment Advisory LLC increased its holdings by 2.3% in the second quarter, now owning 4,935 shares valued at approximately $441,000. Similarly, Leavell Investment Management Inc. raised its stake by 0.4%, acquiring 26,156 shares worth around $2.34 million.

Currently, institutional investors own 72.47% of Nasdaq’s shares, indicating strong institutional confidence in the company. As of the most recent trading session, Nasdaq shares opened at $98.18, with the company boasting a market capitalization of $56.06 billion.

The financial metrics reflect a healthy position for Nasdaq, with a P/E ratio of 35.06 and a debt-to-equity ratio of 0.72. The company has recorded a 52-week low of $64.84 and a 52-week high of $99.59. Its stock has a 50-day moving average price of $90.28 and a 200-day moving average price of $90.99.

On October 21, Nasdaq reported earnings, posting an EPS of $0.88 for the quarter, exceeding the consensus estimate of $0.82 by $0.06. The company’s net margin stood at 19.90%, with a return on equity of 16.28%. Revenue for the quarter was $1.32 billion, surpassing expectations of $1.29 billion and reflecting a year-over-year increase of 14.7%.

Additionally, Nasdaq announced a quarterly dividend of $0.27 per share, which was paid on December 19. This dividend translates to an annualized rate of $1.08 and a yield of 1.1%. The company’s dividend payout ratio is currently 38.57%.

Founded in 1971 as the first electronic stock market by the National Association of Securities Dealers (NASD), Nasdaq, Inc. has evolved into a leading global financial technology firm. Its core operations include overseeing the Nasdaq Stock Market, developing market technology, and providing a variety of financial services to market participants.