Intercontinental Exchange shares moved -13.2% over the last 52 weeks, with a high of $137.4 and a low of $88.6. During this time, the stock lagged the S&P 500 index by -3.1%. As of January 2023, the company's 50-day average price is $105.25. Intercontinental Exchange, Inc., together with its subsidiaries, operates regulated exchanges, clearing houses, and listings venues for commodity, financial, fixed income, and equity markets in the United States, the United Kingdom, the European Union, Singapore, Israel, and Canada. The large-cap Financial Services company has 8,935 full time employees and is based in Atlanta, GA. Intercontinental Exchange has returned a 1.4% dividend yield over the last 12 months.
Growing Revenues With Increasing Reinvestment in the Business:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | |
|---|---|---|---|
| Revenue (MM) | $6,547 | $8,244 | $9,168 |
| Revenue Growth | n/a | 25.92% | 11.21% |
| Operating Margins | 40.9% | 38.1% | 38.7% |
| Operating Margins Growth | n/a | -6.85% | 1.57% |
| Net Margins | 29.52% | 25.34% | 44.26% |
| Net Margins Growth | n/a | -14.16% | 74.66% |
| Earnings Per Share | $3.42 | $3.77 | $7.18 |
| EPS Growth | n/a | 10.23% | 90.45% |
| Diluted Shares (MM) | 565.0 | 555.0 | 565.0 |
| Diluted Shares Growth | n/a | -1.77% | 1.8% |
| Free Cash Flow (MM) | $2,354 | $2,471 | $2,671 |
| FCF Growth | n/a | 4.97% | 8.09% |
| Capital Expenditures (MM) | -$305 | -$410 | -$452 |
| Net Debt / EBITDA | 2.03 | 4.01 | 1.84 |
Intercontinental Exchange's Valuation Is in Line With Its Sector Averages:
Compared to the Financial Services sector's average of 13.34, Intercontinental Exchange has a trailing twelve month P/E ratio of 23.9 and, according to its EPS guidance of 5.55, an expected P/E ratio of 19.4. Intercontinental Exchange's PEG ratio is 0.93 based on its 25.67% annual average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Intercontinental Exchange's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 1.83, which suggests that the company's shares are actually overvalued.
Intercontinental Exchange's P/B ratio is 2.7 compared to its sector average of 1.95. The company is likely overvalued in terms of its book value. As of the date of publication, the company's shares are trading 64.3% above their fair value as represented by their Graham number of $65.69.
On the other hand, Intercontinental Exchange's strong cash flow trend and reasonable levels of debt attenuate the company's lofty valuation in terms of earnings and assets.
There's an Analyst Consensus of Some Upside Potential for Intercontinental Exchange:
14 analysts are following Intercontinental Exchange and have set target prices ranging from $110 to $164 per share. On average, they have given the company a rating of buy. At the current price of $107.94, ICE is trading -15.72% away from its average analyst target price of $128.07 per share, implying an analyst consensus of some upside potential for the stock.
The company has a very low short interest since 0.8% of the company's shares are tied to short positions. Institutions own 91.3% of Intercontinental Exchange's shares, while the insider ownership rate stands at 1.37%. which is a large amount of insider shareholders. The company's biggest shareholder is the Vanguard Group, Inc. with a 8% stake in the company worth approximately $4,861,373,333.
