It hasn't been a great afternoon session for Cboe Global Markets investors, who have watched their shares sink by -1.1% to a price of $191.61. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
The Market May Be Overvaluing Cboe Global Markets's Earnings and Assets:
Cboe Global Markets, Inc., through its subsidiaries, operates as an options exchange worldwide. The company belongs to the Finance sector, which has an average price to earnings (P/E) ratio of 20.04 and an average price to book (P/B) ratio of 1.86. In contrast, Cboe Global Markets has a trailing 12 month P/E ratio of 26.1 and a P/B ratio of 4.77.
Cboe Global Markets has moved 10.3% over the last year compared to 24.2% for the S&P 500 — a difference of -13.9%. Cboe Global Markets has a 52 week high of $221.66 and a 52 week low of $166.13.
Growing Revenues but an Average Current Ratio:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $2,769 | $2,496 | $3,427 | $3,495 | $3,958 | $3,774 |
| Interest Income (M) | -$38 | -$36 | -$38 | -$47 | -$56 | -$50 |
| Operating Margins | 22% | 22% | 19% | 23% | 12% | 28% |
| Net Margins | 15% | 15% | 14% | 15% | 6% | 20% |
| Net Income (M) | $426 | $375 | $468 | $529 | $235 | $761 |
| Depreciation & Amort. (M) | $25 | $24 | $27 | $34 | $35 | $33 |
| Diluted Shares (M) | 112 | 112 | 109 | 107 | 107 | 106 |
| Earnings Per Share | $3.76 | $3.34 | $4.27 | $4.92 | $2.19 | $7.13 |
| EPS Growth | n/a | -11.17% | 27.84% | 15.22% | -55.49% | 225.57% |
| Avg. Price | $100.2 | $101.58 | $92.2 | $111.24 | $113.09 | $191.61 |
| P/E Ratio | 26.51 | 30.32 | 21.54 | 22.56 | 51.4 | 26.76 |
| Free Cash Flow (M) | $498 | $598 | $1,411 | $546 | $591 | $1,031 |
| CAPEX (M) | $36 | $35 | $47 | $51 | $60 | $45 |
| EV / EBITDA | 20.07 | 21.32 | 16.27 | 15.35 | 26.04 | 19.39 |
| Total Debt (M) | $1,515 | $868 | $1,273 | $1,299 | $2,047 | $1,439 |
| Net Debt / EBITDA | 1.99 | 1.14 | 1.49 | 1.14 | 3.07 | 0.82 |
| Current Ratio | 1.15 | 2.16 | 1.19 | 1.31 | 1.05 | 1.43 |
Cboe Global Markets benefits from growing revenues and increasing reinvestment in the business, strong operating margins with a stable trend, and low leverage levels. The company's financial statements show a strong EPS growth trend and positive cash flows. Furthermore, Cboe Global Markets has just enough current assets to cover current liabilities, as shown by its current ratio of 1.43.
