INTERCONTINENTAL EXCHANGE, INC. (ICE): what the price requires
At today's price, INTERCONTINENTAL EXCHANGE, INC. (ICE) is priced for +1.4% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Source: https://boothcheck.com/report/ICE
Headline
| Field | Value |
|---|---|
| Ticker | ICE |
| Company | INTERCONTINENTAL EXCHANGE, INC. |
| Current price | $137.06/sh |
| Composition | Energy futures and options 17% / Agricultural and metals futures and options 2% / Financial futures and options 5% / Cash equities and equity options 25% / OTC and other 3% / Data and connectivity services 8% / Listings 4% / Fixed income execution 1% / CDS clearing 3% / Fixed income data and analytics 10% / Data and network technology 6% / Origination technology 6% / Closing solutions 2% / Servicing software 7% / Data and analytics 2% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 7.3% |
| Operating margin today | 40.7% |
| Margin compression implied | -33.4pp |
| Implied growth | 1.4% |
| Multiple paid | 18x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 7.5% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.3pp.
Reconcile: at the x-ray's 9.3% required return this reads ~13.2%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -1.39σ |
| cohort percentile (of 16 peers) | 38 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.55x | 5 | expensive |
| Earnings | 2.57x | 5 | expensive |
| Relative | 0.93x | 4 | justifies |
| Growth | 0.86x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.5%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $235.12 | 0.58x | yes | FCF base $5.0B, growth 7% (input: historical growth), terminal g 4.0%, WACC 7.4%, 6yr projection |
| DCF Exit Multiple | Growth | $158.89 | 0.86x | yes | Exit EV/EBITDA: 12.2x / 14.2x / 16.2x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $106.26 | 1.29x | yes | P/E 14.36x (blended: static sector reference 12x + trailing (TTM) 20x), scenarios: 12.0x / 14.4x / 16.8x (bear / base = reference held flat / bull), EV/EBITDA N/Ax |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $74.56 | 1.84x | yes | BV/sh $51.72, ROE (TTM) 13.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $88.71 | 1.55x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $108.82 | 1.26x | yes | Rev $13.1B, growth 7% (input: historical growth; tapered), Terminal P/S: 5.0x / 6.0x / 7.0x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $240.45 | 0.57x | yes | EPS $6.87, growth 35% (input: historical EPS growth), PEG=0.57 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $37.62 | 3.64x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $4.16B × (1−25%) / WACC 7.4% → EPV (no growth) |
| Residual Income | Asset | $91.76 | 1.49x | yes | BV $51.72 + 5yr PV of (ROE (TTM) 13.3% − Kₑ 9.3%) × BV; BV grows 8.7%/yr |
| Graham Number | Asset | $89.41 | 1.53x | yes | √(22.5 × EPS $6.87 × BVPS $51.72) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | $53.27 | 2.57x | yes | FCF $4670.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $46.54 | 2.94x | yes | SBC-adj FCF $4.32B (FCF $4.67B − SBC $0.35B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $221.67 | 0.62x | yes | EPS $6.87 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $17.60 | 7.79x | yes | BV $51.72 × (ROIC 2.5% / WACC 7.4%) |
| P/Sales Sector | Relative | $68.83 | 1.99x | yes | Revenue $13.08B × sector P/S 3.0x |
| PEG Fair Value | Relative | $257.63 | 0.53x | yes | EPS $6.87 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $74.27 | 1.85x | yes | EPS $6.87 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $21.3b |
| Net debt / NOPAT (after-tax) | 5.26x |
| Net debt / operating income (pre-tax) | 3.97x |
| Interest coverage | 6.7x |
| Share count CAGR (dilution) | 0.3% |
| Burning cash | no |
Bullet Takeaways
- Intercontinental Exchange owns the rails of global trading, and the economics are extraordinary: its Exchanges segment posted an 80% adjusted operating margin in the first quarter of 2026, the kind of profitability that comes only from an entrenched network position.
- The defining risk is regulatory and competitive pressure on data fees, since ICE's own filing warns that regulatory developments or court rulings could reduce the revenue it earns from exchange market-data and connectivity fees.
- Watch the diversification beyond trading: the Mortgage Technology and Fixed Income and Data segments now add recurring revenue on top of the volatile exchange business, and Fixed Income and Data Services just set a record at $657 million.
Bull Case
What the standard valuation models miss about Intercontinental Exchange is that it is not really three businesses; it is three tollbooths on activity that has to flow somewhere. The asset and earnings-power lenses value it on book and current profit and conclude it is expensive, but they cannot capture the network effect that defines an exchange. Liquidity attracts liquidity: traders go where other traders are, which makes a dominant venue almost impossible to displace and gives ICE pricing power the static methods structurally underprice. The proof is in the margin. In the first quarter of 2026, the Exchanges segment generated $1.78 billion of net revenue at an 80% adjusted operating margin. Among its exchange peers, CME, Cboe, Nasdaq, MarketAxess, and Tradeweb, that combination of scale and margin sits at the top.
The second thing the models miss is the shift toward recurring revenue. ICE has deliberately built around the volatile, volume-driven exchange business with two segments whose revenue recurs regardless of trading activity. Fixed Income and Data Services delivered record revenue of $657 million in the quarter, and Mortgage Technology grew 6%, driven by double-digit growth in Origination Technology and Closing Solutions. Those data-and-software businesses belong to a different peer group, the analytics names like S&P Global, MSCI, and FactSet, and they trade at premium multiples precisely because their revenue is subscription-like and sticky. ICE owns both kinds of business under one roof.
The whole company is firing, and management is returning the cash. Consolidated net revenue rose 18% to $3.0 billion in the quarter, GAAP earnings per share were $2.48, and the company returned $848 million to shareholders, including over $550 million of buybacks. The operating margin across the whole company is about 41%, and free cash flow comfortably funds both the dividend and the repurchases. The methods that do reach the price, the peer-multiple and forward-growth lenses, are the right ones for a business of this quality, and they say the price is justified rather than stretched. The bull case is that an irreplaceable set of market infrastructure, increasingly weighted toward recurring data and software revenue, deserves a premium multiple and keeps compounding.
Bear Case
The moat is real, but the place it is being chipped at is the data business, and that is where the bear should look. ICE earns a large and growing share of revenue from selling the market data its exchanges generate, and the company is direct in its own filing that this stream is exposed: it warns that "developments or court rulings could reduce the amount of revenue that we obtain from exchange market data and connectivity fees related to our U.S. equity and options exchanges, and from mortgage data related to our mortgage technology businesses". Regulators and market participants have spent years arguing that exchange data fees are too high, and the trajectory of that fight is toward more scrutiny, not less. A material rollback of data-fee pricing would hit one of the highest-margin parts of the business directly.
Competition is more present than the dominant-franchise framing suggests. ICE's own 10-K acknowledges considerable competition in equity options, naming Nasdaq and Cboe as its principal U.S. competitors, and lists Nasdaq as the main rival for corporate and ETF listings. The exchange business is not a monopoly; it is an oligopoly where venues compete on fees, technology, and listings, and the cash-equities and listings franchises in particular face pricing pressure and the slow erosion of relative share. The mortgage-technology business, ICE's largest recent strategic bet, is tied to mortgage-origination volumes that are themselves rate-sensitive and cyclical, so a slow-housing, high-rate environment caps growth in the very segment ICE paid up to acquire.
The balance sheet carries the cost of that acquisition strategy. Net debt sits at about $21.3 billion, nearly four times trailing operating income, with interest coverage near 6.7 times, a level that is serviceable but leaves less room than the franchise's quality implies. The valuation methods split: the asset and earnings-power lenses land well below the price, near $37 to $92 per share, while the peer-multiple and growth lenses defend it. The price assumes ICE sustains its growth and protects its data-fee economics, and the priced-in read is within a reasonable range rather than stretched, but the asymmetry is worth naming. The upside is steady compounding of an entrenched franchise; the downside is a regulatory ruling on data fees or a prolonged mortgage-origination slump that compresses the segments the premium multiple is paying for. The downside is not the company breaking; it is the highest-margin revenue line proving more contestable than the price assumes.
Valuation
What the price assumes is modest growth from an already highly profitable base. The inversion reads the embedded growth as low, under 1% on the priced-in basis, which means the price does not require ICE to accelerate; it requires ICE to sustain what it already earns. For a business with a 41% operating margin and an 80% margin in its largest segment, that is a durability assumption rather than a growth bet, and the priced-in read sits within a reasonable range relative to the company's history.
The methods split along a clean line, and the split is informative. The asset and earnings-power lenses say expensive: the earnings-power method, capitalizing normalized operating profit with no growth, lands near $37 per share, and the zero-growth cash-flow methods land near $47 to $53, because they refuse to credit the network-driven pricing power that makes an exchange special. The peer-multiple and forward-growth lenses justify the price: the relative-valuation method lands near $105, and the growth-adjusted earnings methods reach well above the price. For a business of this quality the growth-sensitive lenses are the more appropriate, and they read the price as supported. The right comparison is not a single sector median but the segment cohorts: the Exchanges business against CME, Cboe, and Nasdaq, and the Fixed Income and Data business against S&P Global, MSCI, and FactSet, where recurring-revenue data businesses earn premium multiples.
Solvency is the one place to temper the quality story. Net debt of about $21.3 billion sits near four times trailing operating income with interest coverage around 6.7 times, the legacy of acquiring its way into mortgage technology and data. The cash flows comfortably service that debt, fund the dividend, and supported $848 million of capital return in the quarter, and the share count is essentially flat. The decisive number for ICE is not a valuation gap; it is the durability of the data-and-exchange-fee economics, because that is what makes the premium multiple defensible and what the regulatory and competitive pressures are aimed squarely at.
Catalysts
Intercontinental Exchange reported record first-quarter 2026 results. Consolidated net revenue rose 18% year over year to $3.0 billion, GAAP diluted earnings per share were $2.48, and the company delivered record revenue and record operating income. The Exchanges segment led with $1.78 billion of net revenue at an 80% adjusted operating margin, Fixed Income and Data Services set a record at $657 million, and Mortgage Technology grew 6% on double-digit gains in Origination Technology and Closing Solutions.
On capital, ICE returned $848 million to shareholders during the quarter, including more than $550 million of share repurchases, and management pointed to investments in artificial intelligence and tokenization as forward growth areas. The watch items follow the structure of the business: trading volumes and volatility, which drive the exchange revenue; the regulatory debate over market-data and connectivity fees, which the company itself flags as a revenue risk; and mortgage-origination activity, which sets the ceiling on the Mortgage Technology segment. Each is a lever on a different part of the portfolio, and together they determine whether the recurring-revenue shift keeps lifting the quality of the earnings base.
Peer Cohorts (Per Segment, With Filing Citations)
Exchanges (reported)
- CME (CME Group Inc)
- (no filing in the citation store)
- CBOE (Cboe Global Markets, Inc.)
- (no filing in the citation store)
- NDAQ (Nasdaq, Inc.)
- (no filing in the citation store)
- MKTX (MARKETAXESS HOLDINGS INC.)
- (no filing in the citation store)
- TW (Tradeweb Markets Inc.)
- (no filing in the citation store)
Fixed Income and Data Services (reported)
- SPGI (S&P Global Inc.)
- (no filing in the citation store)
- MSCI (MSCI INC.)
- (no filing in the citation store)
- FDS (FACTSET RESEARCH SYSTEMS INC.)
- (no filing in the citation store)
- VRSK (Verisk Analytics, Inc.)
- (no filing in the citation store)
Mortgage Technology (reported)
- NDAQ (Nasdaq, Inc.)
- (no filing in the citation store)
- CBOE (Cboe Global Markets, Inc.)
- (no filing in the citation store)
- CME (CME Group Inc)
- (no filing in the citation store)
- SF (STIFEL FINANCIAL CORP)
- (no filing in the citation store)
- RJF (RAYMOND JAMES FINANCIAL INC)
- (no filing in the citation store)
- JEF (Jefferies Financial Group Inc.)
- (no filing in the citation store)
- SCHW (SCHWAB CHARLES CORP)
- (no filing in the citation store)
- HLI (Houlihan Lokey, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Intercontinental Exchange FY2025 10-K, accession 0001571949-26-000004 · Intercontinental Exchange Q1 2026 earnings release, 2026