CBOE Stock Study (10-4-26)

Posted by Mark on September 8, 2026 at 06:58 | Last modified: October 4, 2026 15:34

I recently studied CBOE Global Markets, Inc. (CBOE) with a closing price of $271.26.

M* writes:

     > Founded in 1973, Cboe controls the largest option exchange in
     > the US, which provides around 60% of the firm’s revenue. The
     > company is best known for its proprietary S&P 500 and VIX
     > index options, which it offers through an exclusive contract
     > with S&P Global. The firm moved into US and European equities
     > through the $3.4 billion acquisition of BATS in 2017. Cboe
     > has continued to look to expand internationally, using
     > acquisitions to build a presence in both Canada and Australia.

Over the past decade, this medium-size company has grown sales and EPS at annualized rates of 16.3% and 13.2%. Lines are mostly up, straight, and parallel except for sales dips in ’19 and ’23, an EPS dip in ’19, and a larger EPS decline in ’22 (one-time impairment charge due to mid-2022 acquisition of ErisX). Five- (10-) year EPS R^2 is 0.52 (0.56), and Value Line (VL) gives an Earnings Predictability score of 45. Shares outstanding increase a noticeable 29.1% (2.9% per year).

Over the past decade, PTPM is less than peer and industry averages while falling from 46.7% to 33.2% (’25) with a last-5-year mean of 24.0%. ROE is less than peer and industry averages while falling from 63.7% to 22.3% (’25) with a last-5-year mean of 16.4% (shareholder equity consistently positive and increasing 6.5%/year since ’17). Debt-to-Capital is less than peer and industry averages despite increasing from zero to 23.6% (’25) with a last-5-year mean of 28.6%.

Quick Ratio is 0.8 and Interest Coverage 35 per M* who assigns a “Narrow” Economic Moat, “Standard” rating for Capital Allocation, and a B grade for Financial Health (per BI website). VL gives an A rating for Financial Strength.

RightStock—a new tool on the BI website that I will be tracking for informational purposes—gives a fitness score of 75 and opportunity score of 88.

With regard to sales growth:

• YF gives YOY ACE 17.8% and 3.5% for ’26 and ’27, respectively (based on 11 analysts).
• Zacks gives YOY ACE 17.2% and 1.5% for ’26 and ’27, respectively (7 analysts).
• VL projects 7.4% annualized growth from ’25-’30.
• CFRA projects 15.3% YOY and 8.0% per year for ’26 and ’25-’27, respectively.
• M* offers a 2-year ACE of 45.0% contraction but projects 6.3%/year growth from ’25-’30 in Equity Report.

My 6.0% forecast is toward lower end of the range (excluding M*’s puzzling short-term ACE).

With regard to EPS growth:

• MarketWatch gives ACE 19.0% YOY and 15.9% per year for ’25-’27 and ’25-’28, respectively (based on 21 analysts).
• Seeking Alpha projects 4-year annualized growth of 17.7%.
• Finviz gives 5-year annualized ACE of 15.4% (2).
• Argus projects 5-year annualized growth of 4.9%.
• YF gives YOY ACE 31.9% and 7.5% for ’26 and ’27, respectively (14).
• Zacks gives YOY ACE 29.9% and 5.9% for ’26 and ’27 (10) along with 5-year annualized of 18.6%.
• VL projects 11.5% per year from ’25-’30.
• CFRA projects 26.4% YOY and 13.4% per year for ’26 and ’25-’27, respectively.
• M* gives ACE long-term growth of 9.2% (also in Equity Report).

My 7.0% per year forecast is near bottom of the long-term-estimate range (mean of seven: 12.4%). Initial value is ’25 EPS of $10.42/share rather than 2026 Q2 EPS of $12.83 (TTM).

My Forecast High P/E is 25.0. Over the past 10 years, high P/E falls from 34.0 to 25.2 (’25) with last-5-year mean of 27.5 (excluding ’22 upside outlier of 59.6) and a last-5-year-mean average P/E of 23.1 (also excluding ’22 low P/E upside outlier of 47.4). I am below the range.

My Forecast Low P/E is 17.0. Over the past 10 years, low P/E falls from 25.7 to 18.0 (’25) with a last-5-year mean of 18.7 (excluding the 47.4). I am forecasting near bottom of the range [only ’20 (16.9) and ’23 (16.3) are less].

My Low Stock Price Forecast (LSPF) of $177.10 is default based on initial value from above: 34.7% less than previous close and 22.1% less than the 52-week low.

Over the past 10 years, payout ratio (PR) falls from 42.3% to 25.9% (’25) with a last-5-year mean (excluding 89.5% in ’22) of 31.2%. My 25.0% forecast is below the range.

These inputs land CBOE in the HOLD zone with a U/D ratio of 1.0. Total Annualized Return (TAR) is 7.1%.

PAR (using Forecast Average—not High—P/E) of 3.7% is much lower than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on only 19 studies done in the past 90 days (my study and eight outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 7.5%, 8.9%, 27.5, 18.5, and 37.8%, respectively. I am lower across the board. VL projects a future average P/E of 22.5 that is lower than MS (23.0) and greater than mine (21.0).

MS high / low EPS are $18.29 / $11.58 versus my $14.61 / $10.42 (per share). My high EPS is less due to a lower growth rate and initial value. VL (M*) high EPS of $18.00 ($16.18) is in the middle.

MS LSPF of $199.00 implies a Forecast Low P/E of 17.2: less than the above-stated 21.6. MS LSPF is 7.1% less than the default $11.58/share * 18.5 = $214.23 resulting in more conservative zoning. MS LSPF is still 12.4% greater than mine.

MOS is robust in the study mainly because my inputs are near or less than historical/analyst/MS estimates and ranges. Supporting the MOS is MS TAR exceeding mine by 7.4% per year (a bit high although MS sample size really precludes anything but anecdotal comparison) and my lower LSPF.

With regard to valuation, PEG is 1.1 and 2.8 per Zacks and my projected P/E, respectively: fairly valued (0.82 per M*). Relative Value [(current P/E) / 5-year-mean average P/E] is slightly depressed at 0.91. “Quick and dirty” cash flow (including capex, which Google AI insists is correct) has stock undervalued by 32%. M* reports stock overvalued by 13%.

Per U/D, CBOE is a BUY under $224/share. Given forecast high price ~$365, [365.1 / ((13.87 / 100 ) +1 ) ^ 5] ~ $191 meets the BetterInvesting® TAR criterion.

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