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TheStreet Open House

The ICE Man Cometh, and the NYSE Can Hardly Wait

Stocks in this article: NYX ICE

The company's markets provide participants with a means for trading and managing risks associated with price volatility and securing physical delivery of certain contracts, as well as enabling asset allocation or diversification. It also provides various trading-related services, including pre- and post-trade risk management, connectivity, electronic trade confirmation, market data and clearing services to enable integration of front, back, and middle-office trading, as well as processing and risk management capabilities.

ICE, whose customers include corporations, manufacturers, utilities, commodity producers and refiners, financial institutions, institutional and individual investors and government entities will report earnings before the market opens May 1. The average analyst consensus EPS estimate for the latest quarter is around $1.97, down nearly 2.5% from the year-ago quarter.


Sales growth and revenue are estimated to come in at around $347.8 million, which would be almost a 5% decrease from the year-ago quarter. You can learn more about the company and read its latest letter to shareholders that claims, "... With an entrepreneurial culture, we focus on serving our customers through innovation while seeking to deliver best in class growth and returns for our shareholders."

Below is a five-year chart that illustrates the efficacy of that statement.

ICE Chart ICE data by YCharts

After the crash of late 2008 and early 2009, ICE turned on the afterburners when it came to its trailing 12-month EBITDA. ICE doesn't pay a dividend, but it offers an attractive five-year expected price-to-earnings-to-growth ratio of 1.43. If the NYX deal goes through, there should be plenty of growth going forward when it comes to EPS and revenue.

At the end of 2012, ICE had a powerful trailing 12-month operating margin of almost 63% and an impressive profit margin of more than 40%. By the end of 2012, its total cash was $1.61 billion, more than its total debt of $1.13 billion.

NYX's five-year chart is less impressive -- more in line with a share price that couldn't take off until it became a takeover target.

NYX Chart NYX data by YCharts

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