BGC Group (BGC): Valuation in Focus After Revenue Misses Expectations Despite Strong Growth

BGC Group (BGC) released its latest financial results, showing revenue growth of 31% compared to a year ago. However, the figures fell short of market expectations, particularly on EBITDA and revenue metrics. This led to a sell-off.

See our latest analysis for BGC Group.

BGC Group’s share price has been losing momentum in recent months, dropping 9.5% over the past 30 days and 16.3% in the last quarter, bringing its 1-year total shareholder return to -12%. However, longer-term investors are still sitting on healthy multi-year gains, with a 3-year total return topping 120%.

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With BGC Group trading well below analyst price targets after recent losses, investors now face a dilemma: is the stock undervalued and primed for a rebound, or is the future already fully reflected in today's price?

Most Popular Narrative: 41.2% Undervalued

BGC Group's most closely-watched narrative sees fair value far above the last close, setting the stage for a bold recovery. Such a gap does not happen without ambitious profit forecasts and major business shifts behind the scenes.

Continued expansion and strong revenue growth from BGC's electronic trading platforms (notably Fenics and FMX), supported by substantial increases in electronic volumes and market share across asset classes, suggest that BGC is positioned to capitalize on the accelerating shift toward technology-driven trading. This is likely to boost top-line revenue and expand margins due to the higher scalability and profitability of electronic compared to voice-driven trading.

Read the complete narrative.

Curious what drives such an aggressive upside? The secret is a strategy built on rapid platform growth, significant margin expansion, and a financial leap you might not expect. Want to uncover which forecasts underpin this high confidence target? Skip the guesswork and see the numbers that could change your view on BGC’s future.

Result: Fair Value of $14.5 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if market volatility cools or if BGC struggles to realize acquisition synergies, the company's ambitious growth trajectory could quickly come into question.

Find out about the key risks to this BGC Group narrative.

Another View: What Does the DCF Model Say?

While analysts see upside based on future earnings, our SWS DCF model presents a more cautious picture. It calculates a fair value for BGC Group that is well below the current price, suggesting the stock could be overvalued. Which approach best addresses the real growth risks ahead?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out BGC Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 918 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own BGC Group Narrative

If you have a different take or want to dig into the numbers yourself, it only takes a few minutes to build your own narrative, Do it your way

A great starting point for your BGC Group research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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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