Nasdaq Stock Trading Low Following Adenza Deal - A Golden Opportunity For Investors, Says Analyst

Oppenheimer analyst Owen Lau reiterated an Outperform rating on the shares of Nasdaq, Inc. NDAQ, with a price target of $65.

The analyst expects the latest acquisition of Adenza to increase Nasdaq's recurring revenue, margin, and organic growth and broaden the company's offerings, which can drive multiple expansions longer term. 

The analyst notes that with Adenza, NDAQ deepens its ability to serve financial services clients holistically and supercharges its capability to modernize risk and regtech platforms.

Management also expects to achieve $50 million of run-rate revenue synergies in the medium term and $100 million longer term through cross-selling opportunities and deeper client penetration. 

In terms of one-time cost, NDAQ estimates to spend $80 million to achieve these synergies, the analyst adds.

Also Read: Nasdaq Q1 Earnings Top Street View, Boosts Dividend By 10%

Following the deal announcement, Nasdaq shares have been trading low. The analyst sees the sell-off as a buying opportunity for long-term investors. 

Lau recommends investors contemplate the long-term impact, which can accelerate Nasdaq's transformation into a technology provider. 

Nasdaq has been pivoting to become more like a SaaS technology provider, and has targeted SaaS revenue to reach 50%+ of the ARR objective by 4Q27, mentions the analyst. 

Price Action: NDAQ shares are trading higher by 0.13% to $51.06 on the last check Tuesday.