CBOE Outperforms Industry, Trades at a Discount: How to Play the Stock

Shares of Cboe Global Markets, Inc. CBOE have gained 30.2% in the past year, outperforming the industry's growth of 8.6%, the Finance sector’s return of 18.1% and the Zacks S&P 500 composite’s appreciation of 17.9%. 

Cboe Global has outperformed its peers, including Intercontinental Exchange Inc. ICE, S&P Global Inc. SPGI and OTC Markets Group Inc. OTCM. Shares of ICE and SPGI have gained 8.5% and 5%, respectively, while OTCM stock has lost 3.2% in the past year.

With a market capitalization of $26.39 billion, the average volume of shares traded in the last three months was 0.7 million. CBOE has a solid track record of beating earnings estimates in three of the last four quarters, while missing in one, with an average of 2.93%.

CBOE Shares are Undervalued

Cboe Global shares are trading at a discount to the Zacks Securities and Exchange industry. Its forward price-to-earnings of 23.55X is lower than the industry average of 23.83X.

CBOE Trading Above 50-Day and 200-Day Moving Averages

Shares of Cboe Global closed at $252.26 on Wednesday and are trading above the 50-day and 200-day simple moving averages (SMA) of $248.63 and $234.45, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

CBOE’s Growth Projection Encourages

The Zacks Consensus Estimate for Cboe Global’s 2025 earnings per share indicates a year-over-year increase of 18.1%. The consensus estimate for revenues is pegged at $2.36 billion, implying a year-over-year improvement of 13.8%. 

The consensus estimate for 2026 earnings per share and revenues indicates an increase of 5.5% and 3.2%, respectively, from the corresponding 2025 estimates. 

The long-term earnings growth is expected to be 16.3%, better than the industry average of 11%. Earnings have grown 11.4% in the past five years, better than the industry average of 9.6%.

Optimistic Analyst Sentiment on CBOE

Three of the 10 analysts covering the stock have lowered estimates for 2025, while two of the 11 analysts have raised the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 moved 0.8% and 0.5% north, respectively, in the last 30 days.

Average Target Price for CBOE Suggests Upside

Based on short-term price targets offered by 13 analysts, the Zacks average price target is $261.23 per share. The average suggests a potential 4.9% upside from the last closing price.

Factors Impacting CBOE

Cboe Global’s organic strength lies in a diversified business mix that ensures uninterrupted revenue generation and recurring non-transaction revenues. 

CBOE remains on track to grow its recurring non-transaction revenues. Increases in access and capacity fees and proprietary market data fees are likely to boost Data Vantage’s net revenues. Data Vantage is well-positioned to perform well in 2025. For 2025, Cboe Global expects Data Vantage organic net revenues to grow in the high single-digit to low double-digit range from mid to high single-digit. The company expects increased capabilities around data, access, and insights and anticipates growth will be aided by greater demand for access across global markets, with the increase of sales presence in new geographies.

The company achieved a greater global breadth of services and products, as well as new distribution channels, apart from generating revenues and cost synergies through strategic buyouts.

Banking on operational expertise, the company has been strengthening its balance sheet by improving its cash position and lowering its debt balance. Its leverage ratio, as well as the times interest earned, compares favorably with the industry average.

CBOE’s strategic investments are well supported by solid capital management. However, higher expenses remain a major concern. 
Cboe Global has been facing intense competition due to increased market consolidation that tends to reduce market share, and this includes both product and price competition.

The company’s investment in European, Canadian and Asia Pacific operations remains exposed to volatility in currency exchange rates through translation of net assets or equity to U.S. dollars. The company is also exposed to credit risk from third parties, including customers, counterparties and clearing agents.

Conclusion

Cboe Global’s growth strategy of expanding its product line across asset classes, broadening geographic reach, diversifying the business mix with recurring revenues and leveraging technology reflects its operational expertise. 

Its wealth distribution remains impressive. CBOE hiked the dividend by 14% in August 2025 to 72 cents per share, marking the 15th consecutive year of dividend hike. As of Sept. 30, 2025, the company had $614.5 million of availability remaining under its existing share repurchase authorizations. The company remains well-positioned to invest in business, support dividends and opportunistically repurchase shares given continued strong free cash flow generation. 

Thus, it is better to adopt a wait-and-see approach for this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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