Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: A quality valuation analysis on $ICE 🧘🏽‍♂️

•NTM P/E Ratio: 22.13x
•5-Year Mean: 22.31x

•NTM FCF Yield: 5.19%
•5-Year Mean: 4.83%

As you can see, $ICE appears to be trading slightly near fair value

Going forward, investors can expect to receive about the same in earnings per share & ~7% MORE in FCF per share🧠***

Before we get into valuation, let’s take a look at why $ICE is a quality business

BALANCE SHEET🆗
•Cash & Equivalents: $1.00B
•Long-Term Debt: $17.36B

$ICE has an OK balance sheet, an A- S&P Credit Rating & 5.78x FFO Interest Coverage

RETURN ON CAPITAL🆗
•2020: 7.8%
•2021: 8.6%
•2022: 8.3%
•2023: 7.5%
•2024: 8.5%
•LTM: 9.2%

RETURN ON EQUITY🆗
•2020: 11.4%
•2021: 19.2%
•2022: 6.6%
•2023: 10.0%
•2024: 10.5%
•LTM: 11.1%

$ICE has decent return metrics as the company relies heavily on acquisitions

REVENUES✅
•2014: $3.09B
•2024: $9.28B
•CAGR: 11.62%

FREE CASH FLOW✅
•2014: $1.34B
•2024: $4.20B
•CAGR: 12.10%

NORMALIZED EPS✅
•2014: $1.93
•2024: $6.07
•CAGR: 12.14%

SHARE BUYBACKS❌
•2014 Shares Outstanding: 573.00M
•LTM Shares Outstanding: 576.50M

MARGINS✅
•LTM Gross Margins: 100.0%
•LTM Operating Margins: 49.4%
•LTM Gross Margins: 31.0%

***NOW TO VALUATION 🧠

As stated above, investors can expect to receive about the same in EPS & ~7% MORE in FCF per share

Using Benjamin Graham’s 2G rule of thumb, $ICE has to grow earnings at an 11.07% CAGR over the next several years to justify its valuation

Today, analysts anticipate 2025 - 2028 EPS growth over the next few years to be slightly more than the (11.07%) required growth rate:

2025E: $6.93 (14% YoY) *FY Dec

2026E: $7.66 (11% YoY)
2027E: $8.51 (11% YoY)
2028E: $9.55 (12% YoY)

$ICE has a great track record of meeting analyst estimates ~2 years out, but let’s assume $ICE ends 2028 with $9.55 in EPS & see its CAGR potential assuming different multiples

25x P/E: $238.75💵 … ~13.9% CAGR

24x P/E: $229.20💵 … ~12.5% CAGR

23x P/E: $219.65💵 … ~11.1% CAGR

22x P/E: $210.10💵 … ~9.6% CAGR

21x P/E: $200.55💵 … ~8.1% CAGR

As you can see, we’d have to assume ~23x earnings for $ICE to have double-digit CAGR potential

At 24x - 26x, $ICE can CAGR near the mid-teens

$ICE is a high-quality business with a wide-moat & generates ~65% of total revenue from their exchanges revenue — the other ~35% from fixed income & data services revenue & mortgage technology

Though $ICE has traded for an average ~22x multiple over the past 5 years, I believe it’s justified for it to trade for 24x - 26x given its predictability & moat, among other things

$ICE is also still founder led — Jeff Sprecher (Founder & CEO) continues to be a brilliant leader with strategic foresight & a strong track record of executing complex integrations

Today at $162💵 $ICE appears to be a good consideration for investment with a decent margin of safety

#stocks #investing
___

DISCLOSURE‼️: This is NOT Investment Advice. Babylon Capital® and its representatives may have positions in the securities discussed in this post.

The information contained in this post is intended for informational purposes only and should not be construed as investment advice to meet the specific needs of any individual or situation. Past performance is no guarantee of future results.

Information contained in this post has been obtained from sources believed to be reliable, but is not guaranteed as to completeness or accuracy.
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The Startup Ideas Podcast (SIP) 🧃
Free business idea (someone steal this)

ChatGPT just opened their app store to 300 million users

with 7 apps available…

This is like 2008 when flashlight apps could make $10,000 a day.

The App Store minted 1,800 millionaires.

ChatGPT is growing 10x faster than iPhone did.

Here's the play:
• Port your SaaS into ChatGPT as an app.
• Why? Because your competitor hasn't figured this out yet.
• Every category is wide open.

First app in each category will own it.

300M users already inside ChatGPT × 0.1% market share × $20/month = $72M ARR

No ads. No SEO. No begging for downloads.

You have a limited time before every VC-backed startup floods in.

So... who's shipping first
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Emily
Gemini Flash 2.5 Nano banana
Google AI Studio.

{
"scene": "mirror_selfie_otaku_pc_corner_blue",

"subject": {
"gender_presentation": "female",
"age_bracket": "mid_20s",
"ethnicity": "East Asian.
"build": "slim with defined waist; natural proportions",
"skin_tone": "light neutral",
"hair": { "length": "very long", "style": "straight with slight wave ends", "color": "medium brown" },
"pose": {
"stance": "standing, slight contrapposto",
"right_hand": "holding phone in front of face (identity obscured)",
"left_arm": "relaxed alongside torso",
"torso": "subtle arch; midriff visible"
},
"wardrobe": {
"top": "baby-blue cropped knit cardigan, two buttons fastened; blue bralette subtly visible",
"bottom": "denim micro-shorts with blue satin ribbon bows at both hips",
"socks": "thigh-high blue-and-white horizontal stripes",
"accessories": { "phone_case": "blue cute mascot case" }
}
},

"environment": {
"description": "bedroom PC corner seen in a wall mirror",
"furnishings": [
"white desk",
"single monitor with pastel blue wallpaper (no readable text)",
"mechanical keyboard with white keycaps on blue desk mat",
"mouse on small blue mousepad",
"PC tower to the right with blue case lighting",
"three anime figures on/near the PC",
"pagoda poster on wall",
"cat-shaped desk lamp with blue accent",
"clear glass of water",
"tall leafy plant by window (camera-left)"
],
"color_swap": "replace all former pink accents in wardrobe and room with blue (baby blue → sky/periwinkle)."
},

"lighting": {
"source": "daylight from large window camera-left through sheer curtain",
"quality": "soft diffused",
"white_balance_K": 5200
},

"camera": {
"mode": "smartphone rear camera via mirror (no portrait/bokeh mode)",
"focal_length_eq_mm": 26,
"distance_m": { "subject_to_mirror": 0.6, "camera_to_mirror": 0.5 },
"exposure": { "aperture_f": 1.8, "iso": 100, "shutter_s": 0.01, "ev_comp": -0.3 },
"focus": "torso and shorts in reflection",
"depth_of_field": "natural smartphone DOF (deep); background readable, no artificial blur",
"framing": {
"aspect_ratio": "1:1",
"crop": "top of head to mid-thigh; include desk, monitor, PC, and plant",
"angle": "slight downward tilt from mirror viewpoint",
"composition_notes": "keep subject centered; avoid wide-edge stretching by stepping back and cropping square"
}
},

"negatives": [
"pink/magenta accents anywhere",
"beauty-filter/airbrushed skin; poreless look",
"exaggerated or distorted anatomy",
"NSFW, see-through fabric, wardrobe malfunction",
"logos, brand names, readable UI text",
"fake portrait-mode blur, CGI/illustration look"
]
}
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Many people are still not on X. These individuals are likely to join in the near future, particularly those from the VFX industry and content creators from other platforms. Do not assume you are an expert just because you post every day; we are still in the early days.
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FRESH OFF THE PRESS 🔥

Investor interview #119 with Kyle Tushaus from New West Capital.

We discuss...

- His background
- Launching his fund
- Research process
- Valuation framework
- 2 Stock pitches
+ much more...

https://t.co/4VD2d07boi https://t.co/M1Ri9aShie
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RT @AKWilk: Great interview w/ two good pitches, including $NRP.

Interview #119 : Kyle Tushaus (New West Capital), by @capitalemployed
https://t.co/qHY72icmEW
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I love trying to create ONE-TAKE SHOT with AI (in this case using Wan 2.5)

I don’t generate them in a single clip — I build them, piece by piece.

Here’s how I do it 👇🧵 https://t.co/MKFT7SvJEM - Benjamin Munoz Alonso
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