Cboe Global Markets (CBOE) recently came under pressure after traders focused on possible competition from prediction market platform Polymarket, which is seeking CFTC approval and drawing attention to how new entrants might affect exchange operators.

The recent selloff around Cboe Global Markets, triggered by concerns over Polymarket, has pushed the share price down 27.6% over the past month and 11.9% over the last week, even though the year to date share price return is positive at 6.9% and the 5 year total shareholder return stands at 138.9%. This points to strong longer term momentum despite the current pullback.

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With Cboe Global Markets shares down sharply in recent weeks but still showing solid multi year total returns, the key question is whether current prices underestimate its earnings power or if the market is already pricing in future growth.

Most Popular Narrative: 19.7% Undervalued

The most followed narrative currently places Cboe Global Markets' fair value at $330.43 per share compared with the last close of $265.24, framing a meaningful gap that analysts attribute to specific growth and profitability assumptions.

Cboe is experiencing broad-based growth across derivatives, data, and global spot markets, positioning it to benefit from ongoing increases in electronic trading volume and automation. These trends are likely to drive higher transaction-based revenue and support further top-line growth.

Want to see what underpins that higher fair value for Cboe Global Markets? The story hinges on shifting revenue mix, expanding margins, and a future earnings profile that implies a richer multiple than today. Curious which assumptions pull the valuation this far above the current price? The full narrative lays out the exact path in black and white.

Result: Fair Value of $330.43 (UNDERVALUED)

However, Cboe Global Markets still faces concentration risk around its key S&P index options partnership and potential fee pressure if crypto linked competition gains traction.

Another View on Cboe Global Markets Valuation

The earlier narrative framed Cboe Global Markets as about 19.7% undervalued, using analyst earnings forecasts and a forward P/E of roughly 29x. Looking at the current P/E of 22.6x versus a fair ratio of 15.3x, however, suggests the stock is expensive on earnings today, even if it trades at a discount to the 39.9x industry average and 35.2x peer average. That gap points to potential valuation risk if expectations reset.

For a closer look at how this earnings based view compares with the broader market, and what the fair ratio might imply if sentiment cools, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Given the mixed signals around Cboe Global Markets, it makes sense to review the numbers directly and then move quickly to test your own thesis with 4 key rewards.

Looking for more investment ideas beyond Cboe Global Markets?

If you want to round out your view beyond Cboe Global Markets, use targeted stock lists to quickly spot fresh ideas that could fit your approach.

• Target income potential by reviewing companies that show up in our list of 9 dividend fortresses for yield focused portfolios.
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• Prioritize resilience by checking stocks featured in the 67 resilient stocks with low risk scores so you can balance return potential with a focus on stability.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.