Intercontinental Exchange (ICE) AI Stock Analysis

Compare

1,891 Followers

ICE Dividends

Top Page

Intercontinental Exchange

(NYSE:ICE)

78Outperform

Intercontinental Exchange shows strong fundamentals with robust financial performance and positive earnings call insights. The company's technical indicators are neutral, showing consolidation, while valuation metrics indicate a premium price. Despite some challenges in specific segments, the overall outlook remains positive, supporting a favorable score.

Positive Factors

Financial Outlook

The price target for Intercontinental Exchange Inc has been raised to $178.

Industry Transformation

ICE's ability and commitment to digitize the mortgage industry and penetrate the $14b TAM.

Market Position

ICE is best positioned to lead the transformation given significant expertise in driving efficient workflows, organizing data, and leveraging networks across other asset classes such as commodities, equities, & fixed income.

Negative Factors

Investment Analysis

Investors should consider Morgan Stanley Research as only a single factor in making their investment decisions, indicating potential limitations in the analysis.

Intercontinental Exchange (ICE) vs. S&P 500 (SPY)

Market Cap

$93.78B

Dividend Yield1.12%

Average Volume (3M)3.81M

Price to Earnings (P/E)34.1

Beta (1Y)0.72

Revenue Growth15.32%

EPS Growth14.02%

CountryUS

Employees12,920

SectorFinancial

Sector Strength83

IndustryFinancial - Data & Stock Exchanges

Share Statistics

EPS (TTM)4.78

Shares Outstanding574,498,000

10 Day Avg. Volume2,841,217

30 Day Avg. Volume3,812,845

Financial Highlights & Ratios

PEG Ratio2.43

Price to Book (P/B)N/A

Price to Sales (P/S)10.03

Price to Cash Flow (P/CF)16.60

P/FCF Ratio16.60

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$188.85

Price Target Upside15.70% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering14

Intercontinental Exchange Business Overview & Revenue Model

Company DescriptionIntercontinental Exchange (ICE) is a leading global operator of exchanges and clearing houses, and a provider of data and listings services. Founded in 2000, it operates marketplaces for the trading of futures, options, over-the-counter (OTC) energy contracts, and other financial instruments. ICE's core products and services include electronic trading platforms, data services, and post-trade solutions, serving diverse sectors including financial markets, energy, agriculture, and commodities.

How the Company Makes MoneyIntercontinental Exchange generates revenue through several key streams: transaction and clearing fees from its trading platforms, data services subscriptions, and listing fees. Transaction fees are earned each time a trade is executed on its exchanges, while clearing fees are collected for processing and settling trades. ICE Data Services provides critical market data and analytics to financial institutions, which is monetized through subscription-based models. Additionally, ICE earns revenue from companies that pay to list their securities on its stock exchanges. Strategic partnerships and acquisitions further bolster ICE's offerings and market presence, enhancing its ability to generate income across its diversified business segments.

Intercontinental Exchange Financial Statement Overview

Summary

Intercontinental Exchange exhibits strong financial performance with solid revenue and profit growth. The income statement, balance sheet, and cash flow scores reflect efficient cost management and financial stability. Despite some leverage concerns and margin pressure, overall financial health is robust.

Income Statement

Very Positive

Intercontinental Exchange has demonstrated strong revenue and profit growth over recent years. The gross profit margin has improved significantly, indicating efficient cost management. The net profit margin and EBIT margin are robust, showcasing profitability. A notable highlight is the consistent revenue growth rate, with the most recent year showing a substantial increase. However, the slight dip in EBITDA margin suggests some pressure on operating efficiencies.

Balance Sheet

Positive

The balance sheet reflects a stable equity position with a healthy return on equity, indicating effective use of shareholder funds. The equity ratio remains strong, suggesting a good balance between equity and total assets. However, the debt-to-equity ratio is relatively high, implying potential leverage risks, although this is common in the capital markets industry. Overall, the balance sheet indicates financial stability with moderate leverage concerns.

Cash Flow

Positive

Cash flow analysis reveals strong operating cash flow, exceeding net income consistently, which is a positive indicator of cash generation efficiency. Free cash flow growth is impressive, supporting potential reinvestment and shareholder returns. The operating cash flow to net income ratio is healthy, although the free cash flow to net income ratio shows some variability, which could signal fluctuations in capital expenditures.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
11.76B	9.90B	9.64B	9.17B	8.24B
	Gross Profit
6.52B	5.66B	5.20B	5.02B	4.30B
	EBIT
4.31B	3.69B	2.52B	6.22B	3.03B
	EBITDA
6.08B	4.90B	4.80B	5.82B	3.87B
	Net Income Common Stockholders
2.75B	2.37B	1.45B	4.06B	2.09B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.37B	2.11B	1.80B	607.00M	583.00M
	Total Assets
139.43B	136.08B	194.34B	193.50B	126.20B
	Total Debt
20.70B	22.91B	18.38B	14.17B	16.86B
	Net Debt
19.86B	22.01B	16.58B	13.56B	16.27B
	Total Liabilities
111.71B	110.30B	171.58B	170.75B	106.57B
	Stockholders Equity
27.72B	25.72B	22.71B	22.71B	19.50B
Cash Flow		Free Cash Flow
4.20B	3.05B	3.07B	2.67B	2.47B
	Operating Cash Flow
4.61B	3.54B	3.55B	3.12B	2.88B
	Investing Cash Flow
-921.00M	-8.80B	677.00M	-786.00M	-9.83B
	Financing Cash Flow
79.00M	-64.34B	-1.84B	62.03B	6.74B

Intercontinental Exchange Technical Analysis

Technical Analysis Sentiment

Positive

Last Price163.23

Price Trends

50DMA

166.98

Negative

100DMA

160.58

Positive

200DMA

158.63

Positive

Market Momentum

MACD

-1.93

Negative

RSI

50.78

Neutral

STOCH

91.94

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ICE, the sentiment is Positive. The current price of 163.23 is above the 20-day moving average (MA) of 161.37, below the 50-day MA of 166.98, and above the 200-day MA of 158.63, indicating a neutral trend. The MACD of -1.93 indicates Negative momentum. The RSI at 50.78 is Neutral, neither overbought nor oversold. The STOCH value of 91.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ICE.

Intercontinental Exchange Risk Analysis

Intercontinental Exchange disclosed 38 risk factors in its most recent earnings report. Intercontinental Exchange reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Intercontinental Exchange Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CME	81 Outperform	$95.97B	26.47	13.38%	3.99%	11.72%	13.31%
CBOE	79 Outperform	$22.37B	29.48	18.42%	1.15%	8.51%	1.13%
ICE	78 Outperform	$93.78B	34.09	10.32%	1.12%	15.32%	14.02%
NDAQ	74 Outperform	$42.91B	33.91	11.43%	1.28%	25.89%	16.38%
SPGI	73 Outperform	$150.64B	38.97	11.44%	0.77%	13.68%	49.90%
MS	70 Neutral	$174.38B	12.68	13.88%	3.13%	1.45%	55.54%
Sector *	63 Neutral	$12.32B	9.52	7.97%	79.23%	12.77%	-4.57%

* Financial Sector Average

Performance Comparison

ICE

Intercontinental Exchange

163.23

33.99

26.30%

CBOE

Cboe Global Markets

213.59

35.37

19.85%

CME

CME Group

266.30

65.95

32.92%

SPGI

S&P Global

480.00

67.78

16.44%

Morgan Stanley

116.01

26.04

28.94%

NDAQ

Nasdaq

75.36

16.10

27.17%

Intercontinental Exchange Earnings Call Summary

Earnings Call Date: Feb 6, 2025 | % Change Since: 1.86% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong performance with record earnings and revenue growth, significant achievements in the energy and interest rate segments, and successful integration of acquisitions. However, there are some challenges in the mortgage technology and fixed income segments, with certain headwinds affecting specific areas.

Highlights

Record Earnings and Revenue

Full year adjusted earnings per share totaled $6.07, an increase of 8% year-over-year. Net revenues totaled a record $9.3 billion, up 6% on a pro forma basis for the Black Knight acquisition.

Energy Markets Growth

Global Energy business revenues grew 38% year-over-year, driven by a 31% increase in natural gas and environmental products for the full year.

Interest Rate Business Strength

Interest Rates segment saw record revenues, with a 38% year-over-year growth in the fourth quarter and 30% growth for the year.

Successful Black Knight Integration

Achieved $175 million in run rate expense synergies post-acquisition of Black Knight, raising the synergy target to $230 million by 2025.

Free Cash Flow and Shareholder Returns

Generated $3.6 billion in free cash flow, returned $1 billion to shareholders through dividends, and reduced leverage to under 3.3 times EBITDA.

Lowlights

Mortgage Technology Challenges

Fourth quarter recurring revenues in Mortgage Technology were down year-over-year. Some headwinds expected from renewals on Encompass, particularly from 2020 and 2021 vintages.

Exchange Data Services Decline

Sequential decline in Exchange Data Services due to a one-time full year true up to tape revenues at the NYSE, with expected rebound in the first quarter of 2025.

Fixed Income and Data Services Headwinds

Lower tax loss harvesting activity in the municipal bonds business and lower levels of member interest due to two Fed cuts in late 2024.

Company Guidance

During the ICE Fourth Quarter 2024 Earnings Conference Call, the company provided extensive guidance and performance metrics for the fiscal year 2024 and expectations for 2025. ICE reported a record full-year adjusted earnings per share of $6.07, marking an 8% increase year-over-year, with net revenues reaching $9.3 billion, up 6% pro forma for the Black Knight acquisition. The company achieved $175 million in run-rate expense synergies from the acquisition, raising the synergy target to $230 million. ICE's full-year free cash flow was $3.6 billion, with $1 billion returned to shareholders and leverage reduced to under 3.3 times EBITDA. They plan to repurchase shares in the first quarter of 2025. Fourth-quarter adjusted earnings per share were $1.52, representing a 14% year-over-year increase, with net revenues at $2.3 billion. The Exchange segment saw a 9% increase in net revenues, driven by a 13% rise in transaction revenues. For 2025, ICE anticipates mid-single-digit growth in Fixed Income and Data Services recurring revenues, while Mortgage Technology revenues are expected to grow in the low-to-mid single-digit range. Full-year 2025 adjusted operating expenses are projected between $3,915 million and $3,965 million, with a tax rate of 24% to 26% and capital expenditures of $730 million to $780 million. ICE continues to focus on leveraging its data, technology, and customer-driven innovation across its multifaceted business model to drive future growth and shareholder value.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.