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CME Group (CME)
NASDAQ:CME
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CME Group
(NASDAQ:CME)
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Rating:74Outperform
Price Target:
$319.00
▲(19.64% Upside)
CME Group's strong financial performance and strategic growth in market data and crypto trading are significant strengths. However, high valuation and potential overbought technical indicators pose risks. The earnings call revealed both resilience and challenges, with cost discipline and strategic focus providing a balanced outlook.
Positive Factors
Market Data Revenue Growth
The growth in market data revenue reflects strong demand for CME's data products, enhancing its revenue diversification and stability.
Crypto Trading Expansion
Significant growth in crypto trading positions CME as a leader in this emerging market, providing long-term growth opportunities.
Record Trading Volumes
Record trading volumes indicate strong market engagement and demand for CME's diverse product offerings, supporting future revenue growth.
Negative Factors
Revenue Decline
The decline in revenue suggests potential challenges in maintaining growth momentum, which could impact future profitability.
Energy Volumes Decline
Decreased energy volumes may indicate reduced demand in this segment, affecting CME's revenue from a key product area.
Regulatory Challenges
Regulatory challenges in new markets could hinder CME's ability to expand its product offerings, impacting future growth.
CME Group (CME) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$96.15B
Dividend Yield3.92%
Average Volume (3M)1.60M
Price to Earnings (P/E)25.4
Beta (1Y)0.05
Revenue Growth5.84%
EPS Growth8.51%
CountryUS
Employees3,760
SectorFinancial
Sector Strength70
IndustryFinancial - Data & Stock Exchanges
Share Statistics
EPS (TTM)2.68
Shares Outstanding360,596,650
10 Day Avg. Volume1,373,702
30 Day Avg. Volume1,603,571
Financial Highlights & Ratios
PEG Ratio2.56
Price to Book (P/B)3.15
Price to Sales (P/S)13.61
P/FCF Ratio23.21
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue15.41
Enterprise Value/Gross Profit17.89
Enterprise Value/Ebitda18.42
Forecast
1Y Price Target
$287.82Price Target Upside7.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
CME Group Business Overview & Revenue Model
Company DescriptionCME Group Inc., together with its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide. It offers futures and options products based on interest rates, equity indexes, foreign exchange, agricultural commodities, energy, and metals, as well as fixed income products. The company also provides clearing house services, including clearing, settling, and guaranteeing futures and options contracts, and cleared swaps products traded through its exchanges; and trade processing and risk mitigation services. In addition, the company offers a range of market data services, including real-time and historical data services. It serves professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, governments, and central banks. The company was formerly known as Chicago Mercantile Exchange Holdings Inc. and changed its name to CME Group Inc. in July 2007. CME Group Inc. was founded in 1898 and is headquartered in Chicago, Illinois.
How the Company Makes MoneyCME Group generates revenue through several key streams, primarily focusing on transaction fees and market data services. The company charges fees for trades executed on its platforms, which are driven by trading volumes across its diverse product offerings. Additionally, CME earns revenue from clearing services, where it processes and settles trades on behalf of its clients, providing essential risk management functions. The firm also offers market data products, which provide real-time and historical information to clients for a fee. Significant partnerships with financial institutions and technology providers enhance CME's trading capabilities and expand its market reach, contributing to its overall earnings. Furthermore, CME Group benefits from the increasing demand for risk management solutions and the global trend towards electronic trading, which supports its revenue growth.
CME Group Key Performance Indicators (KPIs)
Any
Total Contract Volume
Measures the total number of contracts traded, indicating market activity levels and the company's ability to attract traders.
Measures the total number of contracts traded, indicating market activity levels and the company's ability to attract traders.
Data provided by:
The Fly
The FlyCME Group Earnings Call Summary
Earnings Call Date:Oct 22, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 04, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in average daily volume, open interest, and market data revenue. However, the decline in overall revenue and energy volumes, along with regulatory challenges in prediction markets, presented areas of concern.Q3-2025 Updates
Positive Updates
Second Highest Third Quarter Average Daily Volume
CME Group achieved an average daily volume of 25.3 million contracts, the second highest for a third quarter in its history.
Record Open Interest
Quarter-end open interest reached 126 million contracts, the highest for September in the last 5 years.
Crypto Complex Growth
Crypto complex traded a record 340,000 contracts per day, up over 225% from the previous year.
Market Data Revenue Record
Market data revenue exceeded $200 million for the first time, up 14% to $203 million.
Successful Launch of BrokerTec Chicago
BrokerTec Chicago launched with over $1 billion of notional traded since launch across all 7 tenors.
Adjusted Operating Income and Margin
CME Group reported adjusted operating income of $1.1 billion with a 68.4% operating margin.
Negative Updates
Revenue Decline
Quarterly revenue fell to $1.5 billion, a 3% decrease from the strong third quarter in 2024.
Energy Volumes Decline
Energy volumes were down this quarter after a long run of strong growth, attributed to stabilizing geopolitical risks.
Challenges in Prediction Markets
Uncertainty in regulatory approval for sports-related event contracts with FanDuel and concerns around some political event contracts.
Company Guidance
During the CME Group's third-quarter 2025 earnings call, the company provided guidance on several financial metrics. CME Group reported revenue of $1.5 billion, a decrease of 3% from the same quarter in 2024. The average rate per contract was $0.702, leading to clearing and transaction fees of $1.2 billion. Market data revenue reached a new high of $203 million, up 14%. The firm maintained strong cost discipline, with adjusted expenses at $487 million, or $405 million excluding license fees. Adjusted operating income was $1.1 billion, reflecting a 68.4% operating margin. The adjusted effective tax rate was 22.6%, and the adjusted net income was $978 million, resulting in adjusted diluted earnings per share of $2.68. Capital expenditures for the quarter were about $19 million, and cash on hand was approximately $2.6 billion. Additionally, CME Group paid dividends of $455 million in the third quarter. For the full year, the company expects total adjusted operating expenses, excluding license fees, to be about $1.625 billion, which is $10 million below their prior guidance and $25 million below their initial expectations for the year.CME Group Financial Statement Overview
Summary
CME Group demonstrates strong profitability and a solid balance sheet with low leverage. While cash flow metrics show some volatility, the company's overall financial health remains robust, supported by efficient operations and effective capital management.Income Statement
CME Group shows strong profitability with a high gross profit margin of 86.1% and a net profit margin of 58.6% for TTM. Despite a slight revenue decline in the TTM period, historical revenue growth has been positive. EBIT and EBITDA margins are robust, indicating efficient operations.Balance Sheet
The company maintains a low debt-to-equity ratio of 0.12, reflecting prudent financial leverage. Return on equity is healthy at 13.7%, showcasing effective use of equity capital. The equity ratio is stable, indicating a solid capital structure.Cash Flow
CME Group's cash flow performance is mixed, with a decline in free cash flow growth in the TTM period. However, the free cash flow to net income ratio remains high at 98.2%, suggesting strong cash conversion. Operating cash flow coverage is low, indicating potential liquidity constraints.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.40B | 6.13B | 5.58B | 5.02B | 4.69B | 4.88B |
| Gross Profit | 5.51B | 5.28B | 4.75B | 4.27B | 3.85B | 4.03B |
| EBITDA | 5.35B | 5.04B | 4.67B | 4.02B | 3.93B | 3.35B |
| Net Income | 3.75B | 3.53B | 3.23B | 2.69B | 2.64B | 2.11B |
Balance Sheet | ||||||
| Total Assets | 187.14B | 137.45B | 129.71B | 174.18B | 196.78B | 124.66B |
| Cash, Cash Equivalents and Short-Term Investments | 2.58B | 3.01B | 3.02B | 2.82B | 2.95B | 1.73B |
| Total Debt | 3.42B | 3.43B | 3.43B | 3.44B | 3.45B | 3.44B |
| Total Liabilities | 158.95B | 110.96B | 102.97B | 147.30B | 169.38B | 98.31B |
| Stockholders Equity | 28.19B | 26.49B | 26.74B | 26.88B | 27.40B | 26.32B |
Cash Flow | ||||||
| Free Cash Flow | 4.08B | 3.60B | 3.38B | 2.97B | 2.28B | 2.52B |
| Operating Cash Flow | 4.16B | 3.69B | 3.45B | 3.06B | 2.40B | 2.72B |
| Investing Cash Flow | -78.40M | -82.60M | 20.90M | -489.80M | 58.40M | -175.50M |
| Financing Cash Flow | 45.63B | 5.08B | -48.34B | -25.38B | 69.91B | -2.46B |
CME Group Technical Analysis
Negative
266.64
Price Trends
272.41
Negative
268.69
Negative
269.44
Negative
Market Momentum
-0.80
Positive
42.22
Neutral
25.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CME, the sentiment is Negative. The current price of 266.64 is below the 20-day moving average (MA) of 272.02, below the 50-day MA of 272.41, and below the 200-day MA of 269.44, indicating a bearish trend. The MACD of -0.80 indicates Positive momentum. The RSI at 42.22 is Neutral, neither overbought nor oversold. The STOCH value of 25.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CME.
CME Group Risk Analysis
CME Group disclosed 28 risk factors in its most recent earnings report. CME Group 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
CME Group Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $92.36B | 30.22 | 11.32% | 1.19% | 8.96% | 30.16% | |
78 Outperform | $56.95B | 35.03 | 14.07% | 1.07% | 16.41% | 68.03% | |
75 Outperform | $27.31B | 28.01 | 21.51% | 1.06% | 16.74% | 26.74% | |
74 Outperform | $96.15B | 25.44 | 13.35% | 3.92% | 5.84% | 8.51% | |
73 Outperform | $24.59B | 35.47 | 10.51% | 0.45% | 22.17% | 40.13% | |
68 Neutral | $66.23B | 21.26 | 26.00% | ― | 47.86% | 96.46% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
CME
CME Group
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41.72
18.55%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.