Shares of Cboe Global Markets CBOE have lost 0.8% year to date, outperforming the industry. It, however, lagged the sector as well as the Zacks S&P 500 composite.
Cboe Global Markets is one of the largest stock exchange operators by volume in the United States and a leading market globally for ETP trading. As global capital markets continue to become increasingly electronic and data-driven, CBOE is well-positioned to capitalize on secular trends in trading volumes, demand for market data, and the expansion of index-based investing.
CBOE vs Industry, Sector, S&P 500 YTD
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Shares of Nasdaq Inc NDAQ have lost 13% year to date, while those of Intercontinental Exchange ICE have lost 19.8% in the same time frame.
CBOE Shares Are Affordable
The stock is overvalued compared with its industry. It is currently trading at a forward price-to-earnings multiple of 18.05, lower than the industry average of 18.16 and the median of 21.71 over five years.
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CBOE is relatively cheap compared to Nasdaq but expensive compared to Intercontinental Exchange.
The Case for CBOE Stock
Cboe Global Markets holds a dominant position in the U.S. listed options market through its ownership of multiple options exchanges, consistently maintaining the industry's leading market share.
The company has also built a diversified business through acquisitions and international expansion. Its portfolio now includes European equities and derivatives exchanges, foreign exchange trading venues and clearing infrastructure, reducing reliance on any single asset class or region. In addition, recurring revenues from proprietary market data, index licensing and technology solutions provide stability during periods of weaker trading activity. These businesses generate attractive margins and benefit from high customer switching costs.
Strong trading activity across index options, European equities and foreign exchange continues to drive transaction fee growth, while its Data Vantage business is expanding high-quality recurring revenues. Reflecting this momentum, management raised its 2026 organic total net revenue growth outlook to the low double-digit to mid-teens range and increased its Data Vantage organic growth target to low double digits.
Cboe Global is further strengthening its long-term growth profile through strategic acquisitions and investments that expand its global footprint, product portfolio and capital markets infrastructure. The company is also investing in digital assets, carbon markets and next-generation trading technologies while introducing innovative derivatives products to meet evolving client demand.
At the same time, management is optimizing its portfolio and cost structure. The company has agreed to divest its Canada and Australia exchanges and expects these actions to reduce adjusted operating expenses in 2026, improving overall efficiency.
The company's disciplined capital allocation supports strategic investments while maintaining a strong balance sheet and robust free cash flow generation. Cboe Global has increased its dividend for 15 consecutive years and has $569.4 million remaining under its existing share repurchase authorization, underscoring its commitment to returning capital to shareholders.
Cboe Global’s Growth Projections
The Zacks Consensus Estimate for 2026 revenues indicates a 13.1% year-over-year increase, while that for earnings suggests a 25.2% year-over-year decline. The consensus estimate for 2027 revenues indicates a 2.8% year-over-year increase, while that for earnings suggests an increase of 5.6% year over year.
The expected long-term earnings growth rate is pegged at 16.8%, better than the industry average of 12.2%. It has a Growth Score of A.
Optimist Analyst Sentiment on CBOE
The consensus estimate for 2026 and 2027 earnings has moved 1.2% and 1.4% north, respectively, in the past 30 days, reflecting analysts' optimism.
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The consensus estimate for 2026 earnings of Nasdaq and Intercontinental Exchange has moved north in the past 30 days.
Parting Thoughts on CBOE Shares
A diversified business mix with recurring revenues, accelerated growth banking on recurring non-transaction revenues, use of technology and prudent buyouts poise CBOE well for growth. Its VGM Score of B instills confidence.
Given affordable valuation, solid growth projections and optimistic analyst sentiment, it’s time to add this Zacks Rank #1 (Strong Buy) stock to one’s portfolio. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Cboe Global Markets, Inc. (CBOE): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).