Cboe Global Markets (CBOE) AI Stock Analysis

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Cboe Global Markets

(BATS:CBOE)

78Outperform

Cboe Global Markets receives a strong overall score, driven by its solid financial performance and positive earnings call outcomes. The company's strategic initiatives in derivatives and global expansion offer promising growth prospects. While technical indicators suggest caution due to potential overbought conditions, the strong financial foundation and effective cash flow management provide stability. The CEO transition is seen as a positive development, with experienced leadership poised to sustain growth.

Positive Factors

Competitive Advantages

The key competitive advantages of index options and the expansion into additional client channels should attract more volume over time.

Earnings

Cboe's leading derivatives franchise is a key beneficiary of elevated volatility, which was exhibited as total revenues increased to record levels from higher volumes.

Market Demand

The success of spot crypto ETFs indicates robust market demand for crypto products in a Trad-Fi wrapper.

Negative Factors

Growth Forecast

A significant sequential decline in exchange volumes is expected in the second half, with a forecasted -6% half-over-half growth.

Market Conditions

Concerns exist that the strong first half cyclical setup will decelerate in the second half, especially with potential declines in retail engagement.

Valuation

The valuation setup for CBOE is less attractive as it is 15% more expensive on a relative basis compared to diversified financials.

Cboe Global Markets (CBOE) vs. S&P 500 (SPY)

Market Cap

$23.71B

Dividend Yield1.08%

Average Volume (3M)1.06M

Price to Earnings (P/E)31.4

Beta (1Y)0.02

Revenue Growth8.51%

EPS Growth1.13%

CountryUS

Employees1,685

SectorFinancial

Sector Strength88

IndustryFinancial - Data & Stock Exchanges

Share Statistics

EPS (TTM)7.22

Shares Outstanding104,712,470

10 Day Avg. Volume947,377

30 Day Avg. Volume1,056,305

Financial Highlights & Ratios

PEG Ratio27.69

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap0.89

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit13.13

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$223.92

Price Target Upside-1.09% Downside

Rating ConsensusHold

Number of Analyst Covering13

Cboe Global Markets Business Overview & Revenue Model

Company DescriptionCboe Global Markets, Inc., through its subsidiaries, operates as an options exchange worldwide. It operates through five segments: Options, North American Equities, Futures, Europe and Asia Pacific, and Global FX. The Options segment trades in listed market indices. The North American Equities segment trades in listed U.S. and Canadian equities. This segment also offers exchange-traded products (ETP) transaction and ETP listing services. The Futures segment trades in futures. The Europe and Asia Pacific segment offers pan-European listed equities and derivatives transaction services, ETPs, exchange-traded commodities, and international depository receipts, as well as ETP listings and clearing services. The Global FX segment provides institutional foreign exchange (FX) trading and non-deliverable forward FX transactions services. The company has strategic relationships with S&P Dow Jones Indices, LLC; FTSE International Limited; Frank Russell Company; MSCI Inc.; and DJI Opco, LLC. The company was formerly known as CBOE Holdings, Inc. and changed its name to Cboe Global Markets, Inc. in October 2017. Cboe Global Markets, Inc. was founded in 1973 and is headquartered in Chicago, Illinois.

How the Company Makes MoneyCboe Global Markets makes money primarily through transaction fees collected from trades executed on its platforms. This includes fees from options, futures, and equities trading. The company also generates revenue from access and capacity fees, which are charged to market participants for connectivity and market data subscriptions to its trading systems. Additionally, Cboe earns revenue from market data sales and licensing its proprietary indices and analytics. Strategic partnerships and acquisitions, such as those with technology firms and other exchanges, further enhance its service offerings and contribute to its revenue streams.

Cboe Global Markets Financial Statement Overview

Summary

Cboe Global Markets demonstrates strong financial health with consistent revenue growth, robust profitability margins, and efficient cash flow management. The balance sheet remains solid with controlled debt levels, although there's a slight increase in total debt to monitor.

Income Statement

Very Positive

Cboe Global Markets has shown consistent revenue growth over the years, with a significant increase in revenue from 2019 to 2024. The gross profit margin and net profit margin have remained strong, indicating efficient cost management. The EBIT and EBITDA margins are robust, reflecting healthy operational efficiency. However, there was a slight decline in gross profit margin in 2024 compared to previous years.

Balance Sheet

Positive

The company maintains a solid balance sheet with a healthy equity base and controlled debt levels, as evidenced by a reasonable debt-to-equity ratio. The return on equity (ROE) is commendable, showing effective utilization of equity. The equity ratio indicates a stable capital structure. However, there is a slight increase in total debt over the period, which should be monitored.

Cash Flow

Very Positive

Cboe Global Markets demonstrates strong cash flow generation capabilities, with consistent free cash flow and operating cash flow figures. The free cash flow growth rate is positive, highlighting effective management of operational cash requirements. The operating cash flow to net income ratio is healthy, indicating efficient conversion of profits into cash. However, the fluctuations in investing cash flow suggest variability in investment activities.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.09B	3.77B	3.96B	3.49B	3.43B
	Gross Profit
1.61B	1.92B	1.74B	1.19B	1.03B
	EBIT
1.10B	1.06B	970.10M	805.90M	662.20M
	EBITDA
1.27B	1.27B	1.14B	988.90M	865.90M
	Net Income Common Stockholders
764.90M	761.40M	235.00M	529.00M	468.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.03B	600.70M	524.40M	379.00M	337.80M
	Total Assets
7.79B	7.49B	7.00B	6.81B	6.52B
	Total Debt
1.60B	1.61B	1.87B	1.43B	1.34B
	Net Debt
679.00M	1.07B	1.44B	1.09B	1.09B
	Total Liabilities
3.51B	3.50B	3.53B	3.21B	3.17B
	Stockholders Equity
4.28B	3.98B	3.47B	3.60B	3.35B
Cash Flow		Free Cash Flow
1.04B	1.03B	591.30M	545.80M	1.41B
	Operating Cash Flow
1.10B	1.08B	651.10M	596.80M	1.46B
	Investing Cash Flow
-141.80M	-55.10M	-835.10M	-352.70M	-430.50M
	Financing Cash Flow
-495.00M	-656.10M	81.70M	-200.30M	-201.70M

Cboe Global Markets Technical Analysis

Technical Analysis Sentiment

Positive

Last Price226.39

Price Trends

50DMA

215.13

Positive

100DMA

207.47

Positive

200DMA

205.61

Positive

Market Momentum

MACD

1.55

Negative

RSI

64.38

Neutral

STOCH

90.41

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CBOE, the sentiment is Positive. The current price of 226.39 is above the 20-day moving average (MA) of 214.82, above the 50-day MA of 215.13, and above the 200-day MA of 205.61, indicating a bullish trend. The MACD of 1.55 indicates Negative momentum. The RSI at 64.38 is Neutral, neither overbought nor oversold. The STOCH value of 90.41 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CBOE.

Cboe Global Markets Risk Analysis

Cboe Global Markets disclosed 38 risk factors in its most recent earnings report. Cboe Global Markets reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Cboe Global Markets Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CME	79 Outperform	$101.06B	28.20	13.40%	3.74%	11.72%	13.31%
ICE	79 Outperform	$99.50B	36.28	10.27%	1.05%	15.32%	14.02%
CBOE	78 Outperform	$23.71B	31.39	18.42%	1.08%	8.51%	1.13%
NDAQ	77 Outperform	$44.88B	35.45	11.43%	1.23%	25.89%	16.37%
SPGI	76 Outperform	$155.38B	39.78	11.68%	0.73%	12.98%	42.72%
MSCI	70 Outperform	$43.00B	38.22	-117.99%	1.19%	11.67%	-0.89%
Sector *	64 Neutral	$12.64B	9.74	8.05%	17044.60%	12.66%	-4.62%

* Financial Sector Average

Performance Comparison

CBOE

Cboe Global Markets

226.39

45.73

25.31%

CME

CME Group

280.45

81.65

41.07%

ICE

Intercontinental Exchange

173.45

43.71

33.69%

SPGI

S&P Global

506.62

84.03

19.88%

MSCI

555.82

85.96

18.29%

NDAQ

Nasdaq

78.18

17.42

28.67%

Cboe Global Markets Earnings Call Summary

Earnings Call Date:May 02, 2025

(Q1-2025)

% Change Since: 2.34%|

Next Earnings Date:Aug 01, 2025

Earnings Call Sentiment Positive

The earnings call highlighted a strong financial performance for Cboe with record-breaking revenue and profit, driven by robust growth in derivatives and DataVantage segments. There were strategic expansions in Asia Pacific and continued focus on global sales efforts and product innovation. However, there were challenges in North American equities and some variability in retail engagement. Overall, the sentiment reflects a positive outlook for Cboe's future growth, supported by a strong balance sheet and strategic initiatives.

Q1-2025 Updates

Positive Updates

Record-Breaking Revenue and Profit

Cboe reported a 13% increase in net revenue year over year to a record $565 million and a 16% increase in adjusted diluted earnings per share to a record $2.50.

Strong Derivatives Business Performance

The derivatives business delivered a record quarter with organic net revenue increasing 16% year over year. SPX options volumes increased 13% year over year while VIX options volumes jumped 33%.

DataVantage and Global Expansion

DataVantage business saw an 8% increase in organic net revenue year over year. Cboe expanded client onboarding in Asia Pacific, including new clients in Korea and Taiwan.

Cash and Spot Markets Growth

Cash and spot markets' organic net revenue increased 10%, driven by healthy trading volumes and growth across regional equities.

Future Growth Opportunities

Cboe is focused on expanding its global sales efforts and product innovation, with significant opportunities identified in the Asia Pacific region.

Negative Updates

Challenges in North American Equities

North American equities net revenue increased only 2% year over year, with a 9% decline in net transaction and clearing fees.

Retail Engagement Variability

Retail investors showed disciplined behavior, but their participation during volatility spikes was lower compared to institutional investors.

Company Guidance

During the Cboe Global Markets First Quarter Earnings Call, guidance for 2025 was provided, highlighting an increase in the full-year total organic net revenue growth guidance to mid to high single digits from mid-single digits, reflecting a strong start to the year. The company reaffirmed its DataVantage organic net revenue growth range of mid to high single digits and maintained its full-year adjusted expense guidance range of $837 million to $852 million. Capital expenditures are expected to remain between $75 million and $85 million, with depreciation and amortization projected to be in the $55 million to $59 million range. The effective tax rate on adjusted earnings is anticipated to be between 28.5% and 30.5% for the full year, while interest expense net of interest income is projected at $2 million to $3 million for the second quarter. The company emphasized disciplined expense management, maintaining a strong operating efficiency, and leveraging a flexible balance sheet to produce durable returns for shareholders.

Cboe Global Markets Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Cboe Global Markets Announces CEO Transition

Positive

May 1, 2025

Cboe Global Markets announced the retirement of CEO Fredric J. Tomczyk, effective May 7, 2025, with Craig Donohue appointed as his successor. Donohue, a seasoned executive with extensive experience in global financial markets, is expected to drive forward Cboe’s strategic initiatives and enhance its market leadership, ensuring a smooth transition and continued growth for the company.

Spark’s Take on CBOE Stock

According to Spark, TipRanks’ AI Analyst, CBOE is a Outperform.

Cboe Global Markets has a solid overall performance with strong financial health and positive earnings call outcomes. While its technical indicators show neutral momentum and valuation is relatively high, the company’s strategic initiatives and robust derivatives business offer promising growth prospects.

To see Spark’s full report on CBOE stock, click here.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.