Cboe Global Markets (BATS:CBOE) - Share price, News & Analysis

Q: What is the Fair Price of CBOE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CBOE ($113.17) is trading below our estimate of [[fair value]] ($175.81)

CBOE fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	4/6
Financial Health	6/6
Dividends	4/6

CBOE Stock Overview

Cboe Global Markets, Inc., through its subsidiaries, operates as an options exchange worldwide.

Rewards

Trading at 35.6% below our estimate of its fair value

Earnings are forecast to grow 12.67% per year

Earnings have grown 10.6% per year over the past 5 years

Risk Analysis

Unstable dividend track record

Cboe Global Markets Competitors

MarketAxess Holdings

NasdaqGS:MKTX

US$9.7b

Morningstar

NasdaqGS:MORN

US$10.3b

FactSet Research Systems

NYSE:FDS

US$14.6b

Tradeweb Markets

NasdaqGS:TW

US$16.0b

Price History & Performance

Summary of all time highs, changes and price drops for Cboe Global Markets
Historical stock prices
Current Share Price	US$113.17
52 Week High	US$139.00
52 Week Low	US$103.82
Beta	0.63
1 Month Change	0.77%
3 Month Change	-3.15%
1 Year Change	-4.50%
3 Year Change	2.88%
5 Year Change	22.77%
Change since IPO	248.32%

Recent News & Updates

Jun 06

Cboe Global: Dividend Growth Bargain With Takeover Chances

Cboe Global Markets is an attractively priced company operating in the stock exchange industry with additional growth thanks to current volatility. The company has a decent dividend yield and high dividend growth fueled by its steadily rising free cash flow. Additionally, I believe that the company is a suitable takeover target in its industry, given its valuation and business model.

Shareholder Returns

	CBOE	US Capital Markets	US Market
7D	0.7%	-0.5%	-0.6%
1Y	-4.5%	-21.3%	-21.7%

Return vs Industry: CBOE exceeded the US Capital Markets industry which returned -20.4% over the past year.

Return vs Market: CBOE exceeded the US Market which returned -20.8% over the past year.

Price Volatility

Is CBOE's price volatile compared to industry and market?
CBOE volatility
CBOE Average Weekly Movement	3.8%
Capital Markets Industry Average Movement	0.5%
Market Average Movement	8.0%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.2%

Stable Share Price: CBOE is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: CBOE's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1973	1,196	Ed Tilly	https://www.cboe.com

Cboe 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.

Cboe Global Markets Fundamentals Summary

How do Cboe Global Markets's earnings and revenue compare to its market cap?
CBOE fundamental statistics
Market Cap	US$12.09b
Earnings (TTM)	US$499.70m
Revenue (TTM)	US$3.46b

24.0x

P/E Ratio

3.5x

P/S Ratio

Is CBOE overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CBOE income statement (TTM)
Revenue	US$3.46b
Cost of Revenue	US$1.93b
Gross Profit	US$1.53b
Other Expenses	US$1.03b
Earnings	US$499.70m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Jul 29, 2022

Earnings per share (EPS)	4.71
Gross Margin	44.20%
Net Profit Margin	14.45%
Debt/Equity Ratio	44.7%

How did CBOE perform over the long term?

See historical performance and comparison

Dividends

1.7%

Current Dividend Yield

40%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is CBOE undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CBOE?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CBOE. This is calculated by dividing CBOE's market cap by their current preferred multiple.
What is CBOE's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$12.09b

CBOE key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.8x
Enterprise Value/EBITDA	13x
PEG Ratio	1.9x

Price to Earnings Ratio vs Peers

How does CBOE's PE Ratio compare to its peers?

CBOE PE Ratio vs Peers

The above table shows the PE ratio for CBOE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	48.1x
MKTX MarketAxess Holdings	39.9x	14.1%	US$9.7b
MORN Morningstar	56x	24.2%	US$10.3b
FDS FactSet Research Systems	37x	14.4%	US$14.6b
TW Tradeweb Markets	57.7x	12.8%	US$16.0b
CBOE Cboe Global Markets	24x	12.7%	US$12.1b

Forward PE

Price-To-Earnings vs Peers: CBOE is good value based on its Price-To-Earnings Ratio (24x) compared to the peer average (48.1x).

Price to Earnings Ratio vs Industry

How does CBOE's PE Ratio compare vs other companies in the US Capital Markets Industry?

Price-To-Earnings vs Industry: CBOE is good value based on its Price-To-Earnings Ratio (24x) compared to the US Capital Markets industry average (29.6x)

Price to Earnings Ratio vs Fair Ratio

What is CBOE's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CBOE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	24x
Fair PE Ratio	15.7x

Price-To-Earnings vs Fair Ratio: CBOE is expensive based on its Price-To-Earnings Ratio (24x) compared to the estimated Fair Price-To-Earnings Ratio (15.7x).

Share Price vs Fair Value

What is the Fair Price of CBOE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CBOE ($113.17) is trading below our estimate of fair value ($175.81)

Significantly Below Fair Value: CBOE is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: CBOE is poor value based on its PEG Ratio (1.9x)

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Future Growth

How is Cboe Global Markets forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

12.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CBOE's forecast earnings growth (12.7% per year) is above the savings rate (1.9%).

Earnings vs Market: CBOE's earnings (12.7% per year) are forecast to grow slower than the US market (13.7% per year).

High Growth Earnings: CBOE's earnings are forecast to grow, but not significantly.

Revenue vs Market: CBOE's revenue is expected to decline over the next 3 years (-0.8% per year).

High Growth Revenue: CBOE's revenue is forecast to decline over the next 3 years (-0.8% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CBOE's Return on Equity is forecast to be low in 3 years time (18.3%).

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Past Performance

How has Cboe Global Markets performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

10.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CBOE has high quality earnings.

Growing Profit Margin: CBOE's current net profit margins (14.4%) are higher than last year (12.7%).

Past Earnings Growth Analysis

Earnings Trend: CBOE's earnings have grown by 10.6% per year over the past 5 years.

Accelerating Growth: CBOE's earnings growth over the past year (11.8%) exceeds its 5-year average (10.6% per year).

Earnings vs Industry: CBOE earnings growth over the past year (11.8%) underperformed the Capital Markets industry 78.6%.

Return on Equity

High ROE: CBOE's Return on Equity (14.1%) is considered low.

Discover strong past performing companies

Financial Health

How is Cboe Global Markets's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CBOE's short term assets ($2.9B) exceed its short term liabilities ($2.3B).

Long Term Liabilities: CBOE's short term assets ($2.9B) exceed its long term liabilities ($2.3B).

Debt to Equity History and Analysis

Debt Level: CBOE's net debt to equity ratio (24.8%) is considered satisfactory.

Reducing Debt: CBOE's debt to equity ratio has reduced from 53.9% to 44.7% over the past 5 years.

Debt Coverage: CBOE's debt is well covered by operating cash flow (78.9%).

Interest Coverage: CBOE's interest payments on its debt are well covered by EBIT (18.6x coverage).

Balance Sheet

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Dividend

What is Cboe Global Markets's current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.70%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: CBOE's dividend (1.7%) is higher than the bottom 25% of dividend payers in the US market (1.6%).

High Dividend: CBOE's dividend (1.7%) is low compared to the top 25% of dividend payers in the US market (4.3%).

Stability and Growth of Payments

Stable Dividend: CBOE's dividend payments have been volatile in the past 10 years.

Growing Dividend: CBOE's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (39.8%), CBOE's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (16.9%), CBOE's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure

CEO

Ed Tilly (58 yo)

9.08yrs

Tenure

US$10,646,558

Compensation

Mr. Edward T. Tilly, also known as Ed, serves as Chairman of World Federation of Exchanges since September 9, 2021. He has been the Chief Executive Officer at Cboe Exchange, Inc. and C2 Options Exchange (C...

CEO Compensation Analysis

Compensation vs Market: Ed's total compensation ($USD10.65M) is about average for companies of similar size in the US market ($USD13.59M).

Compensation vs Earnings: Ed's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: CBOE's management team is considered experienced (3.4 years average tenure).

Board Members

Experienced Board: CBOE's board of directors are considered experienced (7.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: CBOE insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/30 00:00
End of Day Share Price	2022/06/30 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31