Cboe Global Markets, Inc.

Analysis of CBOE Global Markets (CBOE)

Technical Perspective CBOE exhibits strong positive momentum, significantly outperforming the broader market with modest volatility. The stock is trading near its 52-week high, suggesting an overbought condition that warrants caution for new entry points despite its defensive characteristics.

Fundamental Strength The company demonstrates robust revenue growth, healthy profit margins, and exceptional financial health with minimal debt. Strong liquidity and efficient operations underline its stable business model, though asset turnover remains modest.

Valuation & Risk Assessment CBOE appears richly valued with high P/E and EV/EBITDA ratios, indicating a premium price for future growth expectations. Risks are relatively low, characterized by minimal volatility and no significant short interest, though regulatory or market volume changes could impact performance.

Investment Recommendation CBOE presents a compelling case for long-term investors seeking a high-quality, low-volatility player in financial infrastructure. While current valuation is elevated, its strong fundamentals, defensive profile, and market-leading position justify consideration on potential pullbacks. Investors should monitor for more attractive entry points rather than chasing the current high.

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Based on the comprehensive analysis provided, here is a 12-month outlook for CBOE Global Markets (CBOE):

12-Month Outlook for CBOE

CBOE's outlook is positive, primarily driven by catalysts including its market-leading position in proprietary products like the VIX index, strong secular demand for volatility and options trading, and its robust, high-margin financial infrastructure business. The key risk is its elevated valuation, which makes the stock susceptible to a pullback if market volatility normalizes or growth fails to meet high expectations, alongside potential regulatory changes. Given the lack of a specific analyst target price, a prudent 12-month target range would be contingent on a market correction providing a better entry point; holding above the $260-$270 support zone would be a positive sign, while a move toward $300 would require flawless execution and sustained market activity. Overall, the stock is best approached on weakness rather than at current highs.

Wall Street Consensus

Most Wall Street analysts are optimistic about Cboe Global Markets, Inc.'s 12-month outlook, with consensus target around $286.17, indicating expected upside potential.

Overall, CBOE has investment potential but also faces challenges. Here are key factors to weigh before investing.

CBOE has demonstrated strong positive momentum with significant outperformance relative to the overall market. The stock shows modest volatility and contained downside risk, reflecting its defensive characteristics as evidenced by a beta well below 1.0.

Short-term performance is robust, with CBOE gaining 3.81% over one month and 8.85% over three months, substantially outperforming the market by 8.32% in the latter period. These consistent gains highlight sustained buying interest and positive investor sentiment toward the stock.

Currently trading at $283.96, CBOE is near the top of its 52-week range of $200.88 to $286.70, placing it just 1% below its recent high. This proximity to its peak suggests the stock is in an overbought condition, warranting caution for new entry points despite its strong momentum.

CBOE demonstrates strong revenue growth with Q4 2025 revenue reaching $1.20 billion, up from $1.14 billion in Q3, while maintaining robust profitability. The company's net profit margin improved to 26.0% in Q4 from 26.3% in Q3, indicating stable earnings quality despite a slight sequential compression. Operating margins remain healthy at 35.6%, reflecting efficient cost management relative to revenue scale.

The company exhibits exceptionally strong financial health with minimal leverage, as evidenced by a low debt ratio of 18.1% and debt-to-equity ratio of 32.8%. CBOE maintains substantial liquidity with a current ratio of 1.87 and cash ratio of 0.94, providing significant operational flexibility. The absence of interest expense in Q4 further underscores the company's conservative capital structure.

CBOE shows solid operational efficiency with a return on equity of 6.1% and return on capital employed of 6.2%, though asset turnover remains modest at 0.13. The company maintains efficient working capital management with days sales outstanding of 34 days, supporting cash conversion cycle effectiveness. Fixed asset turnover of 4.93 indicates productive utilization of property and equipment investments.

Of course. Here is the valuation analysis for CBOE.

Valuation Level CBOE appears richly valued based on traditional metrics. The trailing PE ratio of 32.09 is quite high, suggesting investors are paying a significant premium for its current earnings. While the forward PE of approximately 21.0 indicates expected earnings growth, the very high PEG ratio of nearly 5.0 is a major concern; a PEG above 1.00 typically signals overvaluation relative to its growth trajectory. Furthermore, the exceptionally high EV/EBITDA ratio of 55.96 indicates the company's enterprise value is expensive compared to its core operating profitability.

Peer Comparison A conclusive peer comparison cannot be performed without the specific industry average data for financial exchanges. However, the analyzed metrics can be contextually assessed. A PE near 32 and a Price-to-Book ratio of 6.09 are generally considered elevated for a mature financial services company, implying the market is pricing in significant future growth or a quality premium. The starkly high EV/EBITDA ratio strongly suggests CBOE is valued at a premium compared to typical industry norms, which are typically in the mid-teens for established financial infrastructure firms.

Volatility Risk: CBOE exhibits exceptionally low volatility risk, as evidenced by a beta of 0.347, indicating its price movement is significantly less volatile than the broader market. This is further supported by a modest one-year maximum drawdown of -9.05%, demonstrating strong resilience and limited downside during market corrections.

Other Risks: The absence of any measurable short interest suggests a strong consensus among investors and mitigates the risk of a short squeeze. Potential risks are therefore more likely to stem from broader market dynamics affecting trading volumes or regulatory changes impacting its core exchange and index businesses, rather than from sentiment-driven price shocks.