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Intercontinental Exchange Inc. (ICE)
NYSE:ICE
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Intercontinental Exchange
(NYSE:ICE)
77Outperform
Positive Factors
Earnings Outlook
There is a positive revision in the earnings per share for Intercontinental Exchange Inc.
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 Consideration
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
$96.27B
Dividend Yield1.09%
Average Volume (3M)3.50M
Price to Earnings (P/E)35.0
Beta (1Y)0.70
Revenue Growth15.32%
EPS Growth14.02%
CountryUS
Employees12,920
SectorFinancial
Sector Strength85
IndustryFinancial - Data & Stock Exchanges
Share Statistics
EPS (TTM)4.78
Shares Outstanding574,564,900
10 Day Avg. Volume3,871,803
30 Day Avg. Volume3,500,658
Financial Highlights & Ratios
PEG Ratio2.50
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
$189.08Price Target Upside20.63% 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
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.85
Very Positive
Balance Sheet
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.78
Positive
Cash Flow
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.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Negative
156.74
Price Trends
167.96
Negative
160.39
Negative
157.19
Negative
Market Momentum
1.99
Positive
50.83
Neutral
27.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ICE, the sentiment is Negative. The current price of 156.74 is below the 20-day moving average (MA) of 171.51, below the 50-day MA of 167.96, and below the 200-day MA of 157.19, indicating a bearish trend. The MACD of 1.99 indicates Positive momentum. The RSI at 50.83 is Neutral, neither overbought nor oversold. The STOCH value of 27.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $96.71B | 27.75 | 13.26% | 3.91% | 9.88% | 9.18% | |
79 Outperform | $23.64B | 31.30 | 18.42% | 1.08% | 8.51% | 1.13% | |
77 Outperform | $96.27B | 35.05 | 10.32% | 1.09% | 15.32% | 14.02% | |
74 Outperform | $153.59B | 39.63 | 11.44% | 0.75% | 13.68% | 49.90% | |
72 Outperform | $42.44B | 38.26 | 10.15% | 1.30% | 21.96% | -8.37% | |
67 Neutral | $174.08B | 13.58 | 13.16% | 3.36% | 7.16% | 53.77% | |
63 Neutral | $14.39B | 9.81 | 8.95% | 4.37% | 16.38% | -11.64% |
* Financial Sector Average
Performance Comparison
ICE
Intercontinental Exchange
156.74
21.47
15.87%
CBOE
Cboe Global Markets
215.09
34.92
19.38%
CME
CME Group
254.46
51.12
25.14%
SPGI
S&P Global
451.50
20.62
4.79%
MS
Morgan Stanley
99.83
9.62
10.66%
NDAQ
Nasdaq
68.25
6.95
11.34%
Intercontinental Exchange Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -2.19% | 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.