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Compelling Reasons to Retain Cboe Global (CBOE) Stock Now
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Cboe Global Markets, Inc. (CBOE - Free Report) has been favored by investors on the back of its optimistic medium-term target, strong market position, strategic acquisitions, strength in its proprietary products and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Cboe Global’s 2024 earnings per share indicates a year-over-year increase of 6.9% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $2.05 billion, implying a year-over-year improvement of 7.1% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 6.3% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $2.14 billion, implying a year-over-year improvement of 4.2% from the consensus mark of 2024.
The expected long-term earnings growth rate is 13.6%, which is better than the industry average of 8.9%.
Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 0.4% and 0.4% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Earnings Surprise History
CBOE has a decent earnings surprise history. It beat estimates in each of the last four quarters, with the average being 4.14%.
Return on Equity (ROE)
ROE is a measure reflecting how efficiently a company utilizes shareholders’ money. Cboe Global’s ROE of 22.1% improved 30 basis points year over year. The figure is better than the industry average of 13%.
Zacks Rank & Price Performance
CBOE currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 35.8% compared with the industry’s growth of 37.4%.
Image Source: Zacks Investment Research
Growth Drivers
CBOE is the largest stock exchange operator by volume in the United States and a leading market globally for ETP trading. A diversified business mix with recurring revenues, accelerated growth banking on recurring non-transaction revenues, use of technology and prudent buyouts poise it well for growth.
CBOE’s strength lies in organic growth, as reflected in its revenue growth story. CBOE anticipates organic total net revenue growth in the range of 5-7% in 2024, in line with medium-term organic total net revenue expectations. A volatile market drives trading volume, which, in turn, fuels transaction fees.
Improvement in recurring non-transaction revenues continues to drive the top line. CBOE estimates Data and Access Solutions organic net revenue growth in the range of 7-10% in 2024.
Its inorganic growth story is also impressive. Acquisitions have helped it achieve a greater global breadth of services and products as well as new distribution channels apart from generating revenues and cost synergies.
A solid capital management policy aids the company in making strategic investments that drive growth as well as pay back its shareholders. CBOE increased dividends for 13 straight years and has $384 million left under its current share repurchase authorization.
The company’s shares are trading at a price-to-earnings multiple of 21.29, lower than the industry average of 28.59. Before valuation expands, it is worthy to take a position in the stock, given its operational excellence.
Stocks to Consider
Some better-ranked stocks from the finance sector are HCI Group, Inc. (HCI - Free Report) , Palomar Holdings, Inc. (PLMR - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) . While HCI Group and Palomar Holdings sport a Zacks Rank #1 (Strong Buy) each, Axis Capital carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 522.51%. In the past year, HCI has surged 117.6%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies year-over-year growth of 37.9% and 11.6%, respectively, from the consensus estimate of the corresponding years.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, PLMR has rallied 53.7%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.
Axis Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 102.57%. In the past year, AXS has gained 19.4%.
The Zacks Consensus Estimate for AXS’ 2024 and 2025 earnings implies year-over-year growth of 3% and 10%, respectively, from the consensus estimate of the corresponding years.
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Compelling Reasons to Retain Cboe Global (CBOE) Stock Now
Cboe Global Markets, Inc. (CBOE - Free Report) has been favored by investors on the back of its optimistic medium-term target, strong market position, strategic acquisitions, strength in its proprietary products and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Cboe Global’s 2024 earnings per share indicates a year-over-year increase of 6.9% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $2.05 billion, implying a year-over-year improvement of 7.1% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 6.3% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $2.14 billion, implying a year-over-year improvement of 4.2% from the consensus mark of 2024.
The expected long-term earnings growth rate is 13.6%, which is better than the industry average of 8.9%.
Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 0.4% and 0.4% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Earnings Surprise History
CBOE has a decent earnings surprise history. It beat estimates in each of the last four quarters, with the average being 4.14%.
Return on Equity (ROE)
ROE is a measure reflecting how efficiently a company utilizes shareholders’ money. Cboe Global’s ROE of 22.1% improved 30 basis points year over year. The figure is better than the industry average of 13%.
Zacks Rank & Price Performance
CBOE currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 35.8% compared with the industry’s growth of 37.4%.
Image Source: Zacks Investment Research
Growth Drivers
CBOE is the largest stock exchange operator by volume in the United States and a leading market globally for ETP trading. A diversified business mix with recurring revenues, accelerated growth banking on recurring non-transaction revenues, use of technology and prudent buyouts poise it well for growth.
CBOE’s strength lies in organic growth, as reflected in its revenue growth story. CBOE anticipates organic total net revenue growth in the range of 5-7% in 2024, in line with medium-term organic total net revenue expectations. A volatile market drives trading volume, which, in turn, fuels transaction fees.
Improvement in recurring non-transaction revenues continues to drive the top line. CBOE estimates Data and Access Solutions organic net revenue growth in the range of 7-10% in 2024.
Its inorganic growth story is also impressive. Acquisitions have helped it achieve a greater global breadth of services and products as well as new distribution channels apart from generating revenues and cost synergies.
A solid capital management policy aids the company in making strategic investments that drive growth as well as pay back its shareholders. CBOE increased dividends for 13 straight years and has $384 million left under its current share repurchase authorization.
The company’s shares are trading at a price-to-earnings multiple of 21.29, lower than the industry average of 28.59. Before valuation expands, it is worthy to take a position in the stock, given its operational excellence.
Stocks to Consider
Some better-ranked stocks from the finance sector are HCI Group, Inc. (HCI - Free Report) , Palomar Holdings, Inc. (PLMR - Free Report) and Axis Capital Holdings Limited (AXS - Free Report) . While HCI Group and Palomar Holdings sport a Zacks Rank #1 (Strong Buy) each, Axis Capital carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 522.51%. In the past year, HCI has surged 117.6%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies year-over-year growth of 37.9% and 11.6%, respectively, from the consensus estimate of the corresponding years.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, PLMR has rallied 53.7%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.
Axis Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 102.57%. In the past year, AXS has gained 19.4%.
The Zacks Consensus Estimate for AXS’ 2024 and 2025 earnings implies year-over-year growth of 3% and 10%, respectively, from the consensus estimate of the corresponding years.