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Will Q1 Earnings Hold a Surprise for Nasdaq (NDAQ) Stock?

Nasdaq, Inc. NDAQ is set to report first-quarter 2016 results on Apr 27, before the market opens. Last quarter, the company’s earnings were in line with the expectations. Let’s see how things are shaping up for this announcement.

Factors to be Considered this Quarter

Nasdaq is likely to have witnessed growth in net revenue in the to-be-reported quarter. Also, the company is likely to have witnessed growth in its non-trading segments.

Moreover, the company is expected to have driven its operating leverage through prudent business management. Further, the company has experienced substantial improvement in market technology.

The company has possibly experienced an increase in its Asset Under Management on the back of new exchange traded products linked to NASDAQ indices.

However, Nasdaq is likely to have witnessed a rise in its total core operating expenses, weighing on operating margin expansion. Additionally, the company has likely experienced declining revenues from access and broker services.

With respect to the surprise trend, the company delivered positive surprises in three of the last four quarters with an average beat of 2.50%.

Earnings Whispers

Our proven model does not conclusively show that Nasdaq is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Zacks ESP: Nasdaq has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at 89 cents.

Zacks Rank: Nasdaq carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, an ESP of 0.00% makes surprise prediction difficult.

Currently, the stock is trading at $64.17. We expect the release to lead to stock movement.

Stocks to Consider

Here are some companies from the finance sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:

Arch Capital Group Ltd. ACGL has an Earnings ESP of +1.77% and a Zacks Rank #2. The company is slated to report first-quarter earnings on Apr 27.

Validus Holdings, Ltd. VR has an Earnings ESP of +3.85% and a Zacks Rank #2. The company is set to report first-quarter earnings on Apr 28.

CNA Financial Corporation CNA has an Earnings ESP of +13.33% and a Zacks Rank #3. The company is set to report first-quarter earnings on May 2.

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VALIDUS HOLDING (VR): Free Stock Analysis Report
 
CNA FINL CORP (CNA): Free Stock Analysis Report
 
ARCH CAP GP LTD (ACGL): Free Stock Analysis Report
 
NASDAQ INC (NDAQ): Free Stock Analysis Report
 
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