| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 124.40 | -53 |
| Intrinsic value (DCF) | 105.57 | -60 |
| Graham-Dodd Method | 8.80 | -97 |
| Graham Formula | 90.20 | -66 |
Cboe Global Markets, Inc. (0HQN.L) is a leading global exchange operator specializing in options, equities, futures, and foreign exchange (FX) trading. Headquartered in Chicago, Illinois, and listed on the London Stock Exchange, Cboe operates through five key segments: Options, North American Equities, Futures, Europe and Asia Pacific, and Global FX. The company provides a diverse range of financial products, including listed market indices, exchange-traded products (ETPs), and institutional FX services. With strategic partnerships with major index providers like S&P Dow Jones Indices and MSCI, Cboe plays a pivotal role in global financial markets. Founded in 1973, Cboe has evolved into a critical infrastructure provider for institutional and retail investors, offering liquidity, transparency, and innovative trading solutions. Its diversified revenue streams and global footprint position it as a key player in the financial services sector, particularly in derivatives and electronic trading.
Cboe Global Markets presents a compelling investment case due to its diversified revenue streams, strong market position in derivatives trading, and consistent cash flow generation. With a market cap of $24 billion and a beta of 0.43, the company exhibits lower volatility compared to broader financial markets. Its FY 2024 financials highlight robust performance, with $4.09 billion in revenue and $761 million in net income, translating to a diluted EPS of $7.21. The company's strong operating cash flow ($1.02 billion) supports its dividend payout ($2.44 per share). However, risks include regulatory scrutiny in the exchange industry and competition from other global trading platforms. Cboe's strategic partnerships and technological investments in electronic trading infrastructure provide a competitive edge, making it an attractive long-term holding for investors seeking exposure to financial market infrastructure.
Cboe Global Markets holds a dominant position in the options and derivatives trading space, particularly in the U.S., where it operates the largest options exchange by volume. Its competitive advantage stems from its proprietary trading platforms, deep liquidity pools, and strong brand recognition. The company's strategic alliances with major index providers (e.g., S&P Dow Jones, MSCI) enhance its product offerings and attract institutional investors. Cboe's acquisition of BATS Global Markets in 2017 expanded its equities and ETP trading capabilities, further diversifying its revenue base. However, the company faces stiff competition from other global exchange operators, particularly in Europe and Asia, where local exchanges dominate. Cboe's ability to innovate—such as its expansion into digital assets and cryptocurrency derivatives—positions it well for future growth. Its lower beta (0.43) suggests resilience during market downturns, but regulatory challenges and fee compression in exchange-traded products remain key risks.