Nasdaq trades at $101.49 per share and has stayed right on track with the overall market, gaining 13.7% over the last six months. At the same time, the S&P 500 has returned 10%.

Is there a buying opportunity in Nasdaq, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.

Why Is Nasdaq Not Exciting?

We're sitting this one out for now. Here is one reason there are better opportunities than NDAQ and a stock we'd rather own.

Recent EPS Growth Below Our Standards

Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.

Nasdaq’s EPS grew at an unimpressive 9.2% compounded annual growth rate over the last two years, lower than its 17.5% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Final Judgment

Nasdaq isn’t a terrible business, but it doesn’t pass our bar. That said, the stock currently trades at 26.9× forward P/E (or $101.49 per share). This valuation tells us a lot of optimism is priced in - we think there are better opportunities elsewhere. We’d recommend looking at an all-weather company that owns household favorite Taco Bell.

Stocks We Like More Than Nasdaq

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