Has ICE’s Strong Multi Year Runway Left Much Upside at $158 a Share in 2025?
- Wondering if Intercontinental Exchange at around $158 a share is still a smart buy, or if the easy money has already been made? You are not alone in asking whether the current price really reflects its long term potential.
- The stock has edged up 0.7% over the last week and 5.7% in the past month, building on a solid 57.6% three year gain and 50.9% over five years. Even though the one year return sits at a modest 1.0%, year to date it is up 5.8%.
- Behind those moves, investors have been digesting ongoing developments around ICE's key trading and clearing platforms and its push deeper into mortgage technology and fixed income data services. These strategic shifts help frame whether the market is paying up for growth, or still underestimating the long term value of ICE's network.
- On our framework, Intercontinental Exchange scores a 2 out of 6 for undervaluation checks, suggesting only parts of the market are pricing it as a bargain. Next we will walk through those traditional valuation lenses, and then circle back to a more powerful way to think about what ICE is really worth.
Intercontinental Exchange scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Intercontinental Exchange Excess Returns Analysis
The Excess Returns model asks a simple question: does Intercontinental Exchange generate enough profit on its equity base to justify a premium over its book value, after charging shareholders a fair cost of equity?
For ICE, the starting point is a Book Value of $50.25 per share and a Stable EPS of $7.19 per share, based on weighted future Return on Equity estimates from 5 analysts. With an Average Return on Equity of 14.61%, the company is expected to earn more than its Cost of Equity, which is estimated at $4.28 per share.
The gap between what ICE is expected to earn and what investors require, the Excess Return, is $2.91 per share. Applying this stream of excess returns to a Stable Book Value of $49.20 per share, using projections from 4 analysts, yields an intrinsic value of about $102.86 per share.
Compared with the current share price around $158, the Excess Returns valuation suggests the stock is roughly 53.6% overvalued, implying investors are paying well ahead of the modeled earnings power of the franchise.
Result: OVERVALUED
Our Excess Returns analysis suggests Intercontinental Exchange may be overvalued by 53.6%. Discover 894 undervalued stocks or create your own screener to find better value opportunities.
Approach 2: Intercontinental Exchange Price vs Earnings
For a mature, consistently profitable business like Intercontinental Exchange, the price to earnings, or PE, ratio is a practical way to gauge whether investors are paying a reasonable price for its current earnings power. In general, faster growth and lower perceived risk justify a higher PE, while slower growth, cyclicality, or elevated risk typically warrant a lower multiple.
ICE currently trades on a PE of about 28.5x, which is above the Capital Markets industry average of roughly 25.3x and below the broader peer group average near 33.0x. On the surface, that suggests investors are willing to pay a modest premium to the industry, but not an aggressive one compared with similar stocks.
Simply Wall St’s Fair Ratio framework goes a step further by estimating what PE multiple a company should trade on, given its earnings growth outlook, profitability, risk profile, industry and market capitalization. For ICE, this Fair Ratio is 16.1x, well below the current 28.5x. That gap implies the market is assigning a much richer multiple than the fundamentals alone would justify, even after accounting for growth and quality.
Result: OVERVALUED
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1450 companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Intercontinental Exchange Narrative
Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, a simple way to attach your story about Intercontinental Exchange to the numbers you think are realistic. You can link your view of its future revenue, earnings and margins to a financial forecast and a fair value estimate, then compare that fair value to today’s price, all within an easy to use tool on Simply Wall St’s Community page that millions of investors already use. Each Narrative automatically refreshes as new news or earnings arrive. One investor might build a bullish ICE Narrative anchored around the higher analyst price targets near $227, while another leans on the more cautious $170 view. Both can clearly see when their own estimate of fair value is above or below the current share price and decide whether that means it is time to buy, hold or sell.
Do you think there's more to the story for Intercontinental Exchange? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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