• Investors may be wondering whether Cboe Global Markets at around US$348.56 is still offering value after a strong run, or if they are arriving late to the story.
• The stock has recent returns of 6.6% over 7 days, 17.8% over 30 days, 40.5% year to date and 52.1% over 1 year, so the current price already reflects a lot of optimism from the market.
• These moves sit against a backdrop where investors continue to focus on established exchanges and market infrastructure companies as key parts of the trading ecosystem. Even without a single headline driving the price in the last few weeks, sentiment around liquidity, trading volumes and market access can all influence how investors view Cboe Global Markets.
• Cboe Global Markets has a valuation score of 1/6, so the rest of this article will compare what different valuation methods indicate about that price, and conclude with a framework that can help you interpret those numbers in a more complete way.

Cboe Global Markets scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Cboe Global Markets Excess Returns Analysis

The Excess Returns model evaluates how much value a company can create above the return that shareholders require, based on its equity base and profitability. Instead of focusing on cash flows, it considers whether each dollar of equity is earning more than the cost of that equity.

For Cboe Global Markets, the model uses a Book Value of $51.34 per share and a Stable Book Value of $40.20 per share, based on the median of the past 5 years. Stable EPS is estimated at $9.66 per share, sourced from weighted future Return on Equity estimates from 4 analysts, with an Average Return on Equity of 24.02%. The Cost of Equity is $3.17 per share, which implies an Excess Return of $6.49 per share.

By projecting these excess returns forward and discounting them, the model produces an intrinsic value estimate of about $189.67 per share. Compared with the current share price of around $348.56, this framework suggests the stock is 83.8% overvalued on this measure.

Result: OVERVALUED

Our Excess Returns analysis suggests Cboe Global Markets may be overvalued by 83.8%. Discover 51 high quality undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Cboe Global Markets Price vs Earnings

For profitable companies, the P/E ratio is a useful way to see how much you are paying for each dollar of earnings. This makes it a straightforward cross check against the excess returns result you saw earlier.

What counts as a “normal” P/E depends on how quickly earnings are expected to grow and how risky those earnings are. Higher expected growth or lower risk can justify a higher multiple, while slower growth or higher risk usually points to a lower multiple.

Cboe Global Markets currently trades on a P/E of 29.7x. That is close to the peer average of 29.2x and below the broader Capital Markets industry average of 41.9x. Simply Wall St’s Fair Ratio for Cboe Global Markets is 14.6x, which aims to capture what a more appropriate P/E might be for this specific company.

The Fair Ratio is designed to be more tailored than a simple peer or industry comparison because it incorporates factors such as earnings growth, profit margins, risk profile, industry and market cap into one figure.

Comparing the current P/E of 29.7x with the Fair Ratio of 14.6x suggests the stock is trading above the level implied by those fundamentals.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Cboe Global Markets Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St give you a clear story behind the numbers by letting you set your own view of Cboe Global Markets future revenue, earnings and margins. You can then link that story to a forecast and fair value, and compare that Fair Value with the current price to help you decide whether to act or wait. All of this is available within a simple tool on the Community page that updates as new earnings or news arrive. This is why one investor on the platform can reasonably arrive at a fair value near US$201 per share while another, using much more optimistic assumptions, can reach a figure above US$1,100 per share, with both views made transparent in a way you can assess for yourself.

Do you think there's more to the story for Cboe Global Markets? Head over to our Community to see what others are saying!

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.