A month has gone by since the last earnings report for CME Group (CME Quick QuoteCME - Free Report) . Shares have added about 0.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is CME due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

CME Group Q2 Earnings Top on Higher Trading Volume

CME Group reported second-quarter 2023 record adjusted earnings per share of $2.30, which beat the Zacks Consensus Estimate by 5.5%. The bottom line increased 16.8% year over year. Quarterly results benefited from an increase in trading volumes. Average daily volume increased in four of its six asset classes.

Performance in Detail

CME Group’s revenues of $1.4 billion increased 9.9% year over year. The year-over-year increase was primarily due to higher clearing and transaction fees (up 9.1% year over year) and market data and information services (up 7.5% year over year). The top line beat the Zacks Consensus Estimate by 1.3%.

Total expenses increased 7% year over year to $521.6 million, attributable to higher technology, compensation and benefits, professional fees and outside services, licensing and other fee agreements and other expenses. Expenses exceeded our estimate of $428.1 million.

Operating income increased 11.9% from the prior-year quarter to $838.6 million and beat our estimate of $831.9 million.

Average daily volume (ADV) was 22.9 million contracts. Non-U.S. ADV reached 6.3 million contracts, which included double-digit year-over-year growth in Agricultural, Metals and Energy products

Financial Update

As of Jun 30, 2023, CME Group had $2 billion of cash and marketable securities, down 29.4% from 2022 end. As of Jun 30, 2023, long-term debt was $3.4 billion, down 0.02% from 2022 end. As of Jun 30, 2023, CME had total equity worth $27.4 billion, up 3.5% from 2022 end.

Capital Deployment

CME Group paid out $400 billion in dividends, taking the payout to $213.5 billion since the implementation of the variable dividend policy in early 2012.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

VGM Scores

At this time, CME has a poor Growth Score of F, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise CME has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

CME belongs to the Zacks Securities and Exchanges industry. Another stock from the same industry, Nasdaq (NDAQ Quick QuoteNDAQ - Free Report) , has gained 4.1% over the past month. More than a month has passed since the company reported results for the quarter ended June 2023.

Nasdaq reported revenues of $925 million in the last reported quarter, representing a year-over-year change of +3.6%. EPS of $0.71 for the same period compares with $0.69 a year ago.

Nasdaq is expected to post earnings of $0.67 per share for the current quarter, representing a year-over-year change of -1.5%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.4%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Nasdaq. Also, the stock has a VGM Score of D.