Is Cboe’s Market Approval Reshaping the Investment Case for ASX (ASX:ASX)?

• Australia’s corporate regulator recently approved Cboe Global Markets to operate as a listings market in Australia, directly challenging ASX Limited’s longstanding dominance over company IPOs and share listings.
• This landmark decision introduces new competition to Australia’s capital markets, offering companies and investors fresh options for raising and allocating capital.
• We’ll now explore how Cboe’s entry as a direct competitor in listings could reshape ASX’s earnings outlook and profit drivers.

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ASX Investment Narrative Recap

To own ASX Limited, an investor needs to believe in the company’s central role in Australia’s financial markets, its ability to drive recurring revenue from trading, data, and listings, and its capacity to evolve amid regulatory and technology demands. The recent Cboe approval as a listings market introduces a material near-term risk: credible competition in IPOs and share listings may pressure ASX’s most defensible profit stream, amplifying the importance of technology upgrades and cost control. The biggest risk right now is that competitive and regulatory pressures may compress margins faster than new technology or product initiatives can offset.

Among recent announcements, ASX’s acknowledgement of the ongoing ASIC compliance assessment and inquiry directly ties into this new competitive threat. Regulatory scrutiny could lead to more costly risk management and capability requirements, compounding the potential revenue impact if listing market competition intensifies. Investors are watching closely for signs that cost growth can be controlled as industry change accelerates.

However, with rising costs and growing competition, investors should be aware of the implications if new listings begin shifting to...

Read the full narrative on ASX (it's free!)

ASX's narrative projects A$1.3 billion revenue and A$547.2 million earnings by 2028. This requires 4.9% yearly revenue growth and a A$44.6 million earnings increase from A$502.6 million.

Uncover how ASX's forecasts yield a A$66.51 fair value, a 14% upside to its current price.

Exploring Other Perspectives

Four members of the Simply Wall St Community estimate ASX’s fair value in a wide A$14.48 to A$66.51 range. With new competition for listings, your outlook on margin resilience and earnings sustainability could set your view apart from others.

Explore 4 other fair value estimates on ASX - why the stock might be worth less than half the current price!

Build Your Own ASX Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your ASX research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free ASX research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate ASX's overall financial health at a glance.

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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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