Taking Stock of Valuation After a Strong Multi‑Year Share Price Run

Cboe Global Markets (CBOE) has been quietly grinding higher, with the stock up around 32% over the past year, even as annual revenue slipped and profits inched higher, a mix worth unpacking.

See our latest analysis for Cboe Global Markets.

With the share price now at $251.83 and a strong year to date share price return of 28.2 percent, Cboe appears to have constructive momentum, supported by a robust 1 year total shareholder return of 31.94 percent and triple digit gains over three and five years.

If Cboe has you rethinking what quality looks like in market infrastructure, it might be worth exploring fast growing stocks with high insider ownership for other potential ideas with aligned management incentives.

Still, with revenue drifting lower, earnings inching up, and the share price sitting just shy of analyst targets, investors have to ask: Is Cboe undervalued here, or are markets already pricing in the next leg of growth?

With Cboe Global Markets last closing at $251.83 against a narrative fair value of about $262, the story leans modestly positive and hinges on future execution.

Cboe’s Data Vantage (market data, analytics, and index licensing) is demonstrating consistent double digit revenue growth, supported by high margin, recurring subscription sales, which enhances the predictability and profitability of earnings.

Read the complete narrative.

Want to see why steady data growth supports a richer multiple? The narrative leans on bold margin expansion and surprisingly resilient earnings power. Curious what that path looks like?

Result: Fair Value of $262.08 (UNDERVALUED)

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

However, concentrated reliance on S&P index partnerships and intensifying global competition could challenge Cboe’s growth runway and limit the potential upside implied by this narrative.

Find out about the key risks to this Cboe Global Markets narrative.

Step back from the narrative fair value and the picture looks less forgiving. On a price to earnings basis, Cboe trades at 26.9 times earnings, richer than the US capital markets industry at 25.1 times and well above our fair ratio of 14.4 times, suggesting limited margin for error if growth slows.

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

If this view does not quite match your own thinking, you can review the numbers yourself and develop a new perspective in just a few minutes: Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Cboe Global Markets.

Do not stop at one opportunity when a whole universe of data backed ideas is within reach; your next potential outperformer could be waiting in the screener.

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.

Companies discussed in this article include CBOE.

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