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Here's Why You Should Hold On to Cboe Global (CBOE) Stock
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Cboe Global Markets (CBOE - Free Report) is poised for growth on the back of higher options market ADV, higher subscribers and additional revenues, as well as effective capital deployment.
Earnings Estimate
The Zacks Consensus Estimate for Cboe Global’s 2022 and 2023 earnings per share is pegged at $6.18 and $6.49, indicating a year-over-year increase of 2.1% and 5.1%.
Estimate Revision
The Zacks Consensus Estimate for 2022 and 2023 has moved 0.5% and 0.1% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Earnings Surprise History
Cboe Global has a decent earnings surprise history with a trailing four-quarter earnings surprise of 6.2%, on average.
Zacks Rank
Cboe Global currently carries a Zacks Rank #3 (Hold).
Return on Equity (ROE)
Cboe Global’s ROE for the trailing 12 months is 18.6%, better than the industry average of 14.3% and expanded 120 basis points year over year. This reflects its efficiency in utilizing shareholders’ funds.
Business Tailwinds
By virtue of higher revenues driven by increased transaction fees, access and capacity fees, market data fees, regulatory fees, as well as other revenues across the business segments, Cboe Global’s top-line growth is likely to improve.
Higher options market ADV and increase in European Equities matched ADNV are expected to drive transaction and clearing fees. Higher subscribers and additional revenues attributed to Chi-X Asia Pacific should drive market data fees.
Higher logical port revenues across the Options, Europe and the Asia Pacific, and North American Equities segments, along with an increase in physical port revenues in the North American Equities and Options segments, should benefit the access and capacity fees.
Cboe Global targets organic net revenue growth of 7% to 10% annually over the medium term in the Data and Access Solutions (DnA) business. Additional subscriptions as well as incremental units are likely to drive organic growth in access and capacity fees and proprietary market data fees in the DnA business of Cboe Global.
The derivatives businesses should gain from wider access to products and services globally through new initiatives including the successful launch of 24x5 trading for SPX and VIX options, scaling of new European Derivatives business, and the continued engagement of retail customers in the options market.
Derivatives initiatives are expected to contribute 2- 4% of total organic net revenue growth over the medium term.
Cboe Global targets organic net revenue growth of 5% to 7% annually in 2022.
Cboe Global, being the largest stock exchange operator by volume in the United States and a leading market for ETP trading, enjoys a strong liquidity position. The cash from operations and availability under the revolving credit facility are sufficient to meet cash needs to fund operations, capital expenditures, interest payments on debt, any dividends, and opportunities for share repurchases under the previously announced program.
Solid liquidity mitigates balance-sheet risks and accelerates capital deployment. Cboe Global has $319 million remaining under share repurchase authorizations.
The stock has rallied 15.6% compared with the industry’s increase of 17.4% in the past year.
The Zacks Consensus Estimate for OTC Markets Group’s 2022 earnings has moved up 7.3% in the past 30 days. The expected long-term earnings growth rate is pegged at 9%.
OTC Markets Group’s earnings surpassed estimates in each of the last four quarters, the average beat being 40.75%. In the past year, OTCM has gained 52.7%.
The Zacks Consensus Estimate for Deutsche Boerse’s 2022 and 2023 earnings per share indicates a year-over-year increase of 8.4% and 8.9%, respectively.
Deutsche Boerse’s earnings surpassed estimates in each of the last four quarters, the average beat being 8.05%. In the past year, DBOEY has gained 10.4%.
The Zacks Consensus Estimate for International Money Express’s 2022 earnings has moved up 12.2% in the past 30 days. IMXI’s earnings surpassed estimates in each of the last four quarters, the average beat being 16.37%.
In the past year, IMXI has gained 39.1%. The Zacks Consensus Estimate for IMXI’s 2022 earnings implies 12.9% year-over-year growth.
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Here's Why You Should Hold On to Cboe Global (CBOE) Stock
Cboe Global Markets (CBOE - Free Report) is poised for growth on the back of higher options market ADV, higher subscribers and additional revenues, as well as effective capital deployment.
Earnings Estimate
The Zacks Consensus Estimate for Cboe Global’s 2022 and 2023 earnings per share is pegged at $6.18 and $6.49, indicating a year-over-year increase of 2.1% and 5.1%.
Estimate Revision
The Zacks Consensus Estimate for 2022 and 2023 has moved 0.5% and 0.1% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Earnings Surprise History
Cboe Global has a decent earnings surprise history with a trailing four-quarter earnings surprise of 6.2%, on average.
Zacks Rank
Cboe Global currently carries a Zacks Rank #3 (Hold).
Return on Equity (ROE)
Cboe Global’s ROE for the trailing 12 months is 18.6%, better than the industry average of 14.3% and expanded 120 basis points year over year. This reflects its efficiency in utilizing shareholders’ funds.
Business Tailwinds
By virtue of higher revenues driven by increased transaction fees, access and capacity fees, market data fees, regulatory fees, as well as other revenues across the business segments, Cboe Global’s top-line growth is likely to improve.
Higher options market ADV and increase in European Equities matched ADNV are expected to drive transaction and clearing fees. Higher subscribers and additional revenues attributed to Chi-X Asia Pacific should drive market data fees.
Higher logical port revenues across the Options, Europe and the Asia Pacific, and North American Equities segments, along with an increase in physical port revenues in the North American Equities and Options segments, should benefit the access and capacity fees.
Cboe Global targets organic net revenue growth of 7% to 10% annually over the medium term in the Data and Access Solutions (DnA) business. Additional subscriptions as well as incremental units are likely to drive organic growth in access and capacity fees and proprietary market data fees in the DnA business of Cboe Global.
The derivatives businesses should gain from wider access to products and services globally through new initiatives including the successful launch of 24x5 trading for SPX and VIX options, scaling of new European Derivatives business, and the continued engagement of retail customers in the options market.
Derivatives initiatives are expected to contribute 2- 4% of total organic net revenue growth over the medium term.
Cboe Global targets organic net revenue growth of 5% to 7% annually in 2022.
Cboe Global, being the largest stock exchange operator by volume in the United States and a leading market for ETP trading, enjoys a strong liquidity position. The cash from operations and availability under the revolving credit facility are sufficient to meet cash needs to fund operations, capital expenditures, interest payments on debt, any dividends, and opportunities for share repurchases under the previously announced program.
Solid liquidity mitigates balance-sheet risks and accelerates capital deployment. Cboe Global has $319 million remaining under share repurchase authorizations.
The stock has rallied 15.6% compared with the industry’s increase of 17.4% in the past year.
Image Source: Zacks Investment Research
Stocks to Consider
Some better-ranked stocks from the finance sector include OTC Markets Group Inc. (OTCM - Free Report) , Deutsche Boerse AG (DBOEY - Free Report) and International Money Express Inc. (IMXI - Free Report) . While OTC Markets sports a Zacks Rank #1 (Strong Buy), Deutsche Boerse and International Money Express carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for OTC Markets Group’s 2022 earnings has moved up 7.3% in the past 30 days. The expected long-term earnings growth rate is pegged at 9%.
OTC Markets Group’s earnings surpassed estimates in each of the last four quarters, the average beat being 40.75%. In the past year, OTCM has gained 52.7%.
The Zacks Consensus Estimate for Deutsche Boerse’s 2022 and 2023 earnings per share indicates a year-over-year increase of 8.4% and 8.9%, respectively.
Deutsche Boerse’s earnings surpassed estimates in each of the last four quarters, the average beat being 8.05%. In the past year, DBOEY has gained 10.4%.
The Zacks Consensus Estimate for International Money Express’s 2022 earnings has moved up 12.2% in the past 30 days. IMXI’s earnings surpassed estimates in each of the last four quarters, the average beat being 16.37%.
In the past year, IMXI has gained 39.1%. The Zacks Consensus Estimate for IMXI’s 2022 earnings implies 12.9% year-over-year growth.