Is Intercontinental Exchange Stock Undervalued?

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Is Intercontinental Exchange Stock Undervalued?

Intercontinental Exchange (NYSE: ICE), one of the largest exchange operators and clearing houses in the world, gained a meager 3% – increasing from about $115 at the beginning of 2021 to around $119 currently, underperforming the S&P500, which grew 14% over the same period. While the stock has benefited from higher cash equities and equity options trading volumes in 2021, the positive impact was offset by the lower contract volume in other categories. Overall, the stock has seen high volatility this year. There were two main reasons behind the jump in equity trading volumes: First, the approval of the $1. 9 trillion stimulus package. Second, the higher level of engagement of retail investors. But is this all there is to the story? Not quite, despite the recent gains, Trefis estimates Intercontinental Exchange's valuation to be around $132 per share – 11% above the current market price – based on a key opportunity and one risk factor. The opportunity we see is an improved trajectory for Intercontinental Exchange's revenues over the subsequent quarters. ICE's total revenues of $8. 2 billion for the full year 2020 were 26% ahead of the 2019 figure. This translated into net revenues (revenue

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