Cboe Global Markets (CBOE) AI Stock Analysis

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Cboe Global Markets

(BATS:CBOE)

79Outperform

Cboe Global Markets demonstrates solid financial performance with strong revenue growth and profitability, supported by effective cash flow management. The positive earnings call sentiment and strategic initiatives bolster the outlook, though valuation concerns and market uncertainties warrant careful consideration.

Positive Factors

Crypto Options

Optimistic on crypto index options potential at HOOD with healthy adoption expected.

Marketing and Education

CBOE plans to sustain elevated spending on marketing and investor education to boost penetration.

Price Objective

Reit. Buy on secular index option thesis with a price objective increase to $251, implying 20% total return potential.

Negative Factors

Commissions

Commissions might be a barrier to adoption given how Robinhood users have grown accustomed to zero-commission trading.

VIX Contracts

Upside from VIX contracts likely to be quite small.

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

Market Cap

$22.52B

Dividend Yield1.13%

Average Volume (3M)917.69K

Price to Earnings (P/E)29.8

Beta (1Y)<0.01

Revenue Growth8.51%

EPS Growth1.13%

CountryUS

Employees1,685

SectorFinancial

Sector Strength80

IndustryFinancial - Data & Stock Exchanges

Share Statistics

EPS (TTM)7.22

Shares Outstanding104,712,470

10 Day Avg. Volume929,338

30 Day Avg. Volume917,690

Financial Highlights & Ratios

PEG Ratio26.31

Price to Book (P/B)N/A

Price to Sales (P/S)5.48

Price to Cash Flow (P/CF)-7.90

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$223.45

Price Target Upside7.81% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering12

Cboe Global Markets Business Overview & Revenue Model

Company DescriptionCboe Global Markets, Inc. is a leading provider of market infrastructure and tradable products, delivering cutting-edge trading, clearing, and investment solutions to market participants around the world. The company operates across various sectors including equities, derivatives, and foreign exchange, and is renowned for its innovative products such as options and futures trading on its exchanges. Cboe's core services include operating regulated securities and derivatives exchanges, offering trading technology solutions, and providing market data services.

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 exhibits strong financial health with steady revenue growth, robust profitability margins, and efficient cash flow management. The balance sheet reflects a stable financial position with manageable debt levels. While the company shows positive financial performance, continuous monitoring of debt levels and investment activities is advised to maintain financial stability.

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

Negative

Last Price207.27

Price Trends

50DMA

212.13

Negative

100DMA

206.03

Positive

200DMA

201.47

Positive

Market Momentum

MACD

3.70

Negative

RSI

63.44

Neutral

STOCH

90.30

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CBOE, the sentiment is Negative. The current price of 207.27 is below the 20-day moving average (MA) of 217.42, below the 50-day MA of 212.13, and above the 200-day MA of 201.47, indicating a neutral trend. The MACD of 3.70 indicates Negative momentum. The RSI at 63.44 is Neutral, neither overbought nor oversold. The STOCH value of 90.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CME	82 Outperform	$91.70B	26.31	13.26%	4.13%	9.88%	9.18%
CBOE	79 Outperform	$22.52B	29.82	18.42%	1.13%	8.51%	1.13%
ICE	77 Outperform	$90.06B	32.78	10.32%	1.17%	15.32%	14.02%
SPGI	74 Outperform	$141.70B	36.56	11.44%	0.82%	13.68%	49.90%
MSCI	73 Outperform	$39.38B	36.13	-117.99%	1.30%	12.94%	-2.54%
NDAQ	72 Outperform	$39.25B	35.39	10.15%	1.41%	21.96%	-8.37%
Sector *	63 Neutral	$12.86B	9.19	9.16%	4.78%	16.31%	-8.97%

* Financial Sector Average

Performance Comparison

CBOE

Cboe Global Markets

207.27

27.10

15.04%

CME

CME Group

252.37

49.03

24.11%

ICE

Intercontinental Exchange

154.65

19.38

14.33%

SPGI

S&P Global

438.31

7.43

1.72%

MSCI

506.56

-36.00

-6.64%

NDAQ

Nasdaq

67.74

6.44

10.51%

Cboe Global Markets Earnings Call Summary

Earnings Call Date: Feb 7, 2025 | % Change Since: 0.44% | Next Earnings Date: May 2, 2025

Earnings Call Sentiment Positive

The earnings call reflected a generally positive sentiment, highlighting strong annual performance, record figures in key business areas, and strategic initiatives such as the partnership with Robinhood and the launch of Cboe Titanium. However, there were some challenges with decreasing futures revenue and rising operating expenses.

Highlights

Record-Breaking Annual Results

Cboe Global Markets achieved record net revenue of $2.1 billion in 2024, an 8% increase from the previous year, and a record adjusted diluted EPS of $8.61, marking a 10% growth.

Strong Derivatives Business Performance

The Derivatives business saw organic net revenue increase by 8%, with a record-breaking 3.8 billion contracts traded in 2024, driven by SPX and VIX options reaching record volumes.

Growth in Data Vantage Business

Data Vantage business reported a 7% increase in organic net revenue in 2024, supported by technology investments and global market reach.

Cash and Spot Markets Growth

Organic net revenue in Cash and Spot Markets increased by 10%, driven by healthy trading volumes across all regional equities markets.

Retail Expansion via Robinhood Partnership

Cboe's index options are now available to all Robinhood customers, expanding retail access and adoption potential.

Introduction of Cboe Titanium

Cboe unveiled its new unified technology platform, Cboe Titanium, enhancing trading technology and market participant experiences.

Lowlights

Decrease in Futures Net Revenue

Futures net revenue decreased by 7% year-over-year in Q4 2024, primarily due to a 12% decline in ADV.

Higher Operating Expenses

Adjusted operating expenses increased by 7% in Q4 2024, driven by higher travel, promotional expenses, and technology support services expenses.

Geopolitical and Market Uncertainties

There remains significant uncertainty due to geopolitical tensions and market volatility, impacting investor sentiment and market conditions.

Company Guidance

During Cboe Global Markets' fourth-quarter earnings call, the company reported a 5% year-over-year increase in net revenue, reaching $524.5 million, and a 2% rise in adjusted diluted earnings per share, hitting $2.10. For the full fiscal year 2024, Cboe achieved an 8% increase in net revenue, totaling $2.1 billion, and a 10% boost in adjusted diluted earnings per share to $8.61. The Derivatives business saw a notable performance with a total volume of 3.8 billion contracts traded and an average daily volume (ADV) of nearly 15 million contracts. SPX and VIX options achieved record volumes, with SPX options reaching an ADV of 3.1 million contracts, and VIX options an ADV of 830,000 contracts. The Data Vantage segment grew its organic net revenue by 7%, driven by enhancements in technology and global distribution. The company also outlined a guidance for 2025, expecting mid-single-digit growth in total organic net revenue and mid to high-single-digit growth in Data Vantage organic net revenue. Cboe plans to manage adjusted expenses between $837 million and $852 million, with a focus on strategic investments and disciplined expense management.

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.