CME Group (CME): Assessing Valuation as New Digital Asset and Prediction Products Launch

CME Group (CME) is taking steps to boost its digital asset and prediction market offerings. The company recently announced new bitcoin volatility indices, along with a collaboration with FanDuel to launch a dedicated prediction market app.

See our latest analysis for CME Group.

CME Group’s shares have gradually built momentum this year, as recent product launches and partnerships fuel renewed interest in the stock. The 19.02% year-to-date share price gain, together with a strong 23.44% one-year total shareholder return, highlights growing optimism around its innovation pipeline and market positioning. Notably, the new bitcoin volatility indices and FanDuel Predicts app announcement came as total shareholder returns over three and five years reached 82.12% and 89.51% respectively, underscoring both near-term enthusiasm and longer-term value creation for investors.

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With positive share price momentum and ambitious product launches, some investors may wonder if CME Group’s current valuation already reflects its growth story or whether a genuine buying opportunity still exists.

Most Popular Narrative: 2.9% Undervalued

With CME Group's latest close at $276.98 and the most popular narrative fair value set at $285.12, a modest gap hints at untapped upside according to key market watchers. The consensus places CME just shy of 3% below what they see as justified value, inviting closer attention to the company's long-term financial drivers.

Robust international expansion, with record-breaking double-digit ADV growth across EMEA and APAC and rising participation from both institutional and retail clients globally, broadens CME's addressable market and underpins future volume and revenue growth. The rapid acceleration of retail engagement, highlighted by a 56% increase in new retail traders and five consecutive quarters of double-digit retail client acquisition growth, diversifies CME's client base and supports both volume and transaction-based revenue growth.

Read the complete narrative.

Wonder how CME’s fair value is nearly within reach of today’s price? Analysts are zeroing in on international momentum and a retail wave that could dramatically alter future earnings. Curious about the key profit and revenue forces fueling such confidence? The numbers that unlock this valuation surprise are only revealed inside the full story.

Result: Fair Value of $285.12 (UNDERVALUED)

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

However, periods of low volatility or rapid industry innovation could quickly dampen trading activity and challenge CME Group’s projected growth trajectory.

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

Another View: Multiples Tell a Different Story

While market narratives point to upside, the price-to-earnings ratio presents a more cautious picture. CME trades at 26.9x, which is higher than the US Capital Markets industry average of 23.4x and well above the fair ratio of 15.1x. This difference suggests limited upside and a potential risk of overvaluation. Could short-term enthusiasm be causing investors to overlook these numbers?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own CME Group Narrative

If you have a different perspective or want to draw your own conclusions, you can explore the data and craft a personalized view in just a few minutes, so Do it your way.

A great starting point for your CME Group research is our analysis highlighting 1 key reward and 2 important warning signs 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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