Cboe Global Markets (CBOE) reported that earnings have grown at an average rate of 19.2% per year over the last five years, with the latest year’s EPS growth at 26%, outpacing this long-term trend. Net profit margins reached 21.2%, up from 19.6% a year ago, even as revenue is forecast to decline by 17.1% annually for the next three years. With earnings still expected to rise by 6.1% per year and profitability showing resilience, investors face a nuanced picture. Recent margin gains provide some confidence, but the outlook for revenue and the broader market’s higher growth rate keep expectations in check.
See our full analysis for Cboe Global Markets.
The key question now is how these results stack up against the widely followed narratives for Cboe Global Markets. In the next section, we’ll see which storylines are reinforced and which might be due for a rethink.
See what the community is saying about Cboe Global Markets
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Analysts expect profit margins to rise sharply from 19.8% now to 42.9% in three years, even as revenue is forecast to fall by 17.1% per year over the same period.
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According to analysts’ consensus view, high-margin, recurring market data and data analytics sales are offsetting declines from core trading, resulting in steadier, more predictable profits for Cboe.
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Consensus narrative highlights that expansion into data services and global diversification are key offsets to expected revenue contraction.
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This push into high-margin segments supports earnings growth that outpaces the broader US market, which may surprise investors who focus solely on headline revenue declines.
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Consensus narrative also notes that strategic international expansion, especially in Europe and the Asia Pacific region, is enhancing revenue stability at a time when traditional transaction-based revenue may come under pressure.
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By unlocking new sources of trading activity and increasing demand for recurring market data, these efforts are expected to boost Cboe’s addressable market and support margin resilience.
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This creates a foundation for sustained profit growth, even as legacy revenue streams face headwinds.
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Additionally, consensus narrative indicates that ongoing investment in scalable technology infrastructure and divestitures of underperforming businesses are driving operating leverage. As a result, net profit margins are projected to nearly double despite revenue contraction.
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Such operating leverage is seen as critical for Cboe’s ability to improve efficiency and achieve sustainable margin expansion in a competitive market.
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Investors may find this projection particularly compelling given that the broader US market is only forecast to grow earnings by 15.9% per year, compared to Cboe’s 6.1% annual earnings growth with much higher projected margins.
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📊 Read the full Cboe Global Markets Consensus Narrative.
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The current price-to-earnings ratio (P/E) of 26.3 places Cboe below direct peer averages (29.7), but above the broader US Capital Markets industry average (25.6).
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Consensus narrative flags that, while Cboe trades at a discount to peers, its slight premium relative to the wider industry reflects confidence in its profit durability.
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The market appears willing to price in Cboe’s projected profit margin expansion and resilience, even as core business lines come under pressure.
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This valuation is also notable because analysts’ target price (248.63) is just slightly above the current share price (245.64), suggesting perceived upside is limited at current levels.
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There are currently no major or minor risks noted in the reported data. However, analysts warn that Cboe’s reliance on strategic index partnerships like S&P and the rise of new fintech and blockchain solutions could pose future threats to its core revenue streams.
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Consensus narrative stresses that while the quality of Cboe’s earnings supports investor confidence today, concentration risks and the costs of global expansion could limit longer-term growth if diversification efforts fall short.
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Reliance on a single index partner introduces a critical risk, as any disruption in this relationship could significantly impact Cboe’s recurring revenues.
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Expanding into new global markets and technology investments involves execution risk that, if mishandled, may put downward pressure on future margins or growth potential.
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To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Cboe Global Markets on Simply Wall St. Add the company to your watchlist or portfolio so you’ll be alerted when the story evolves.
Have your own take on the figures? Bring fresh insight and build your unique perspective in just a few minutes with Do it your way.
A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Cboe Global Markets.
While Cboe Global Markets’ profit margins are forecast to rise, its revenue is expected to decline and future growth could lag the broader market.
If you want to focus on companies delivering steady expansion in both revenue and earnings, check out stable growth stocks screener (2103 results) that consistently outperform in both up and down markets.
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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