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Here's Why You Should Stay Invested in Cboe Global (CBOE)
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Cboe Global Markets’ (CBOE - Free Report) strong market position, global reach, proprietary products’ strength and solid capital position poise it well for long-term growth. The Zacks Consensus Estimate for 2024 and 2025 earnings has moved up 1% and 0.7%, respectively, in the past 30 days, reflecting analysts’ optimism.
This largest stock exchange operator by volume in the United States and a market leader globally for ETP trading has a solid history of delivering earnings surprises in the last seven reported quarters. Its earnings grew 12.1% in the last five years, better than the industry average of 9.8%.
Return on invested capital has hovered around 10% over the last few years and outperformed the industry average in the trailing 12 months. The company has raised its capital investment significantly, which reflects its efficiency in utilizing funds to generate income.
CBOE’s trailing 12-month return on equity is 22.1%, ahead of the industry average of 13.1%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Shares of this Zacks Rank #3 (Hold) company have gained 2.5% year to date, compared with the industry’s increase of 3.3%. It has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Image Source: Zacks Investment Research
What’s Driving the Stock?
A diversified business mix with recurring revenues, growth in recurring non-transaction revenues, use of technology and prudent buyouts poise CBOE well for growth.
CBOE’s strength lies in organic growth as reflected in its revenue growth story. Improving transaction fees should help it retain momentum. A volatile market drives trading volume. This apart, recurring and increasing non-transaction revenues driven by higher access and capacity fees and market data revenues should add to the upside.
Banking on the strength of its inorganic growth, CBOE achieved a greater breadth of services and products globally. It also gained new distribution channels apart from generating revenues and cost synergies. It remains focused on improving margins through cost management.
A solid capital management policy supports strategic growth investments as well as capital payout. As part of the distribution of wealth to shareholders, CBOE increased dividends for 13 straight years. Its dividend yield is 1.2%. As of Mar 31, 2024, it had approximately $294.8 million remaining under its existing share repurchase authorization. Moving forward, the company will look to opportunistically repurchase shares, given continued strong free cash flow generation.
The Zacks Consensus Estimate for 2024 earnings is pegged at $8.45, suggesting a year-over-year increase of 8.3% on 7.4% higher revenues of $2.1 billion. The consensus estimate for 2025 earnings is pegged at $8.95, suggesting a year-over-year increase of 6% on 4.4% higher revenues of $2.2 billion.
The expected long-term earnings growth rate is 14.3%, better than the industry average of 8.1%. We expect the 2025 bottom line to witness a three-year CAGR of 3.3%. The company has a Growth Score of B. This style score analyzes the growth prospects of a company.
Coinbase delivered a trailing four-quarter average earnings surprise of 364.63%. COIN stock has gained 17.5% year to date. The Zacks Consensus Estimate for COIN’s 2024 EPS indicates a year-over-year increase of 1,804.5%.
The Zacks Consensus Estimate for First BanCorp’s 2024 and 2025 EPS indicates a year-over-year increase of 3.5% and 6.2%, respectively. Year to date, FBP has gained 10.4%. First BanCorp delivered a trailing four-quarter average earnings surprise of 17.05%.
Morgan Stanley delivered a trailing four-quarter average earnings surprise of 11.15%. Year to date, the stock has risen 6.6%. The Zacks Consensus Estimate for MS’s 2024 and 2025 earnings suggests a year-over-year rise of 25.3% and 13.3%, respectively.
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Here's Why You Should Stay Invested in Cboe Global (CBOE)
Cboe Global Markets’ (CBOE - Free Report) strong market position, global reach, proprietary products’ strength and solid capital position poise it well for long-term growth. The Zacks Consensus Estimate for 2024 and 2025 earnings has moved up 1% and 0.7%, respectively, in the past 30 days, reflecting analysts’ optimism.
This largest stock exchange operator by volume in the United States and a market leader globally for ETP trading has a solid history of delivering earnings surprises in the last seven reported quarters. Its earnings grew 12.1% in the last five years, better than the industry average of 9.8%.
Return on invested capital has hovered around 10% over the last few years and outperformed the industry average in the trailing 12 months. The company has raised its capital investment significantly, which reflects its efficiency in utilizing funds to generate income.
CBOE’s trailing 12-month return on equity is 22.1%, ahead of the industry average of 13.1%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Shares of this Zacks Rank #3 (Hold) company have gained 2.5% year to date, compared with the industry’s increase of 3.3%. It has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Image Source: Zacks Investment Research
What’s Driving the Stock?
A diversified business mix with recurring revenues, growth in recurring non-transaction revenues, use of technology and prudent buyouts poise CBOE well for growth.
CBOE’s strength lies in organic growth as reflected in its revenue growth story. Improving transaction fees should help it retain momentum. A volatile market drives trading volume. This apart, recurring and increasing non-transaction revenues driven by higher access and capacity fees and market data revenues should add to the upside.
Banking on the strength of its inorganic growth, CBOE achieved a greater breadth of services and products globally. It also gained new distribution channels apart from generating revenues and cost synergies. It remains focused on improving margins through cost management.
A solid capital management policy supports strategic growth investments as well as capital payout. As part of the distribution of wealth to shareholders, CBOE increased dividends for 13 straight years. Its dividend yield is 1.2%. As of Mar 31, 2024, it had approximately $294.8 million remaining under its existing share repurchase authorization. Moving forward, the company will look to opportunistically repurchase shares, given continued strong free cash flow generation.
The Zacks Consensus Estimate for 2024 earnings is pegged at $8.45, suggesting a year-over-year increase of 8.3% on 7.4% higher revenues of $2.1 billion. The consensus estimate for 2025 earnings is pegged at $8.95, suggesting a year-over-year increase of 6% on 4.4% higher revenues of $2.2 billion.
The expected long-term earnings growth rate is 14.3%, better than the industry average of 8.1%. We expect the 2025 bottom line to witness a three-year CAGR of 3.3%. The company has a Growth Score of B. This style score analyzes the growth prospects of a company.
Stocks to Consider
Some better-ranked stocks from the finance sector are Coinbase Global (COIN - Free Report) , First BanCorp (FBP - Free Report) and Morgan Stanley (MS - Free Report) . Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Coinbase delivered a trailing four-quarter average earnings surprise of 364.63%. COIN stock has gained 17.5% year to date. The Zacks Consensus Estimate for COIN’s 2024 EPS indicates a year-over-year increase of 1,804.5%.
The Zacks Consensus Estimate for First BanCorp’s 2024 and 2025 EPS indicates a year-over-year increase of 3.5% and 6.2%, respectively. Year to date, FBP has gained 10.4%. First BanCorp delivered a trailing four-quarter average earnings surprise of 17.05%.
Morgan Stanley delivered a trailing four-quarter average earnings surprise of 11.15%. Year to date, the stock has risen 6.6%. The Zacks Consensus Estimate for MS’s 2024 and 2025 earnings suggests a year-over-year rise of 25.3% and 13.3%, respectively.