Cboe Global Stock Falls 22% in 3 Months: Time to Buy the Dip?

Shares of Cboe Global Markets CBOE have lost 22% in the past three months, underperforming the industry, the sector as well as the Zacks S&P 500 composite. 
 
Cboe Global Markets is one of the largest stock exchange operators by volume in the United States and a leading market globally for ETP trading.  As global capital markets continue to become increasingly electronic and data-driven, CBOE is well-positioned to capitalize on secular trends in trading volumes, demand for market data and the expansion of index-based investing.

CBOE vs Industry, Sector, S&P 500 in 3-Months

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Shares of Nasdaq Inc NDAQ have gained 5.6% in the past three months, while those of Intercontinental Exchange ICE have lost 2.6% in the same time frame.

CBOE Shares Are Affordable

The stock is overvalued compared with its industry. It is currently trading at a forward price-to-earnings multiple of 19.81, lower than the industry average of 20.1 and the median of 21.64 over five years.  
 

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CBOE is relatively cheap compared to Nasdaq but expensive compared to Intercontinental Exchange.

The Case for CBOE Stock

Cboe Global Markets holds a dominant position in the U.S. listed options market, operating multiple exchanges and consistently maintaining an industry-leading market share.

Through acquisitions and international expansion, Cboe has developed a diversified portfolio spanning European equities and derivatives, foreign exchange venues, and clearing infrastructure. This diversification reduces its dependence on any single asset class or geographic market. Its proprietary market data, index licensing, and technology solutions also generate stable, high-margin recurring revenues supported by substantial customer switching costs.

Strong activity in index options, European equities and foreign exchange continues to fuel transaction-fee growth, while the Data Vantage segment is expanding recurring revenues. Reflecting this momentum, management raised its 2026 organic total net revenue growth outlook to the mid-to-high teens from its previous low-double-digit to mid-teens range. It also increased Data Vantage’s organic net revenue growth target from the low double digits to the low teens.

Cboe continues to strengthen its long-term prospects through strategic acquisitions and investments that broaden its geographic reach, product offerings and capital-markets infrastructure. The company is also pursuing opportunities in digital assets, carbon markets, next-generation trading technologies and innovative derivatives products.

Meanwhile, management is streamlining the portfolio and cost base. Planned divestitures of its Canadian and Australian exchanges are expected to lower adjusted operating expenses in 2026 and improve efficiency.

Supported by robust free cash flow and a strong balance sheet, Cboe maintains disciplined capital allocation. The company has increased its dividend for 15 consecutive years and retains $536.8 million under its share-repurchase authorization, demonstrating its commitment to shareholder returns.

Cboe Global’s Growth Projections

The Zacks Consensus Estimate for 2026 revenues indicates a 16.3% year-over-year increase, while that for earnings suggests a 29.2% year-over-year increase. The consensus estimate for 2027 revenues indicates a 2.8% year-over-year increase, while that for earnings suggests an increase of 5.6% year over year. 

The expected long-term earnings growth rate is pegged at 18.6%, better than the industry average of 13.1%.

Optimist Analyst Sentiment on CBOE

The consensus estimate for 2026 and 2027 earnings has moved 2.3% and 2.6% north, respectively, in the past 30 days, reflecting analysts' optimism.
 

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The consensus estimates for 2026 earnings of Nasdaq and Intercontinental Exchange have moved north in the past 30 days.

Parting Thoughts on CBOE Shares

A diversified business mix with recurring revenues, accelerated growth banking on recurring non-transaction revenues, use of technology and prudent buyouts poise CBOE well for growth. 

Given affordable valuation, solid growth projections and optimistic analyst sentiment, it’s time to add this Zacks Rank #2 (Buy) stock to one’s portfolio. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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This article originally published on Zacks Investment Research (zacks.com).

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