Stock Update & Outlook Report on Cboe Global Markets, Inc. (NASDAQ:CBOE)

Brokerage firm analysts are predicting that Cboe Global Markets, Inc. (NASDAQ:CBOE) will grow at an accelerated rate over the next five years. Sell-side analysts are looking for the company to grow 17.43% over the next year and 20.75% over the next five years. EPS measures what each share is worth …

Brokerage firm analysts are predicting that Cboe Global Markets, Inc. (NASDAQ:CBOE) will grow at an accelerated rate over the next five years. Sell-side analysts are looking for the company to grow 17.43% over the next year and 20.75% over the next five years.

EPS measures what each share is worth and also indicates how much money their sharehoders would gain if the company was to pay out all of its profits. Earnings Per Share is computed by dividing the total profit by its total shares. Cboe Global Markets, Inc.’s trailing 12- months EPS is 1.85. Last year, their EPS growth was -7.60% and their EPS growth over the past five years was 8.40%.

RECENT PERFORMANCE

Let’s start off by taking a look at how the stock has been performing recently. Over the past twelve months, Cboe Global Markets, Inc. (NASDAQ:CBOE)’s stock was 71.00%. Last week, it was 2.63%, 20.64% over the last quarter, and 40.50% for the past half-year.

Over the past 50 days, Cboe Global Markets, Inc. stock was 0.04% off of the high and 18.93% removed from the low. Their 52-Week High and Low are noted here. 0.04% (High), 76.21%, (Low).

HISTORICAL GROWTH

Cboe Global Markets, Inc. (NASDAQ:CBOE)’s performance this year to date is 71.00%. The stock has performed 2.63% over the last seven days, 10.71% over the last thirty, and 20.64% over the last three months. Over the last six months, Cboe Global Markets, Inc.’s stock has been 40.50% and 64.78% for the year.

FUTURE GROWTH ESTIMATES AND RECOMMENDATIONS

Wall Street analysts are have a consensus analyst recommendation of 2.50 on the stock. This is based on a 1-5 scale where 1 represents a Strong Buy and 5 a Strong Sell. Brokerages covering the name have a $117.58 on the stock.

The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

CUI Global, Inc. (CUI) Reaches $2.71 After 9.00% Up Move; Cboe Global Markets (CBOE) Shorts …

The stock of CUI Global, Inc. (NASDAQ:CUI) is a huge mover today! The stock increased 4.23% or $0.11 during the last trading session, reaching $2.71. About 58,232 shares traded. CUI Global, Inc. (NASDAQ:CUI) has declined 32.86% since December 12, 2016 and is downtrending.

December 12, 2017 – By Linda Rogers

The stock of CUI Global, Inc. (NASDAQ:CUI) is a huge mover today! The stock increased 4.23% or $0.11 during the last trading session, reaching $2.71. About 58,232 shares traded. CUI Global, Inc. (NASDAQ:CUI) has declined 32.86% since December 12, 2016 and is downtrending. It has underperformed by 49.56% the S&P500.The move comes after 7 months positive chart setup for the $76.98 million company. It was reported on Dec, 12 by Barchart.com. We have $2.95 PT which if reached, will make NASDAQ:CUI worth $6.93M more.

Cboe Global Markets Incorporated (NASDAQ:CBOE) had a decrease of 29.57% in short interest. CBOE’s SI was 5.00M shares in December as released by FINRA. Its down 29.57% from 7.10M shares previously. With 744,800 avg volume, 7 days are for Cboe Global Markets Incorporated (NASDAQ:CBOE)’s short sellers to cover CBOE’s short positions. The SI to Cboe Global Markets Incorporated’s float is 6.22%. The stock increased 1.19% or $1.5 during the last trading session, reaching $127.85. About 554,697 shares traded. Cboe Global Markets, Inc. (NASDAQ:CBOE) has risen 34.37% since December 12, 2016 and is uptrending. It has outperformed by 17.67% the S&P500.

CBOE Holdings, Inc., through its subsidiaries, operates as an options exchange in the United States. The company has market cap of $14.51 billion. It offers marketplaces for trading options on various market indexes; futures on the VIX Index; options on the stocks of individual firms comprising equity options; and options on other exchange-traded products that include ETP options, such as exchange-traded funds and exchange-traded notes, as well as other index options. It has a 68.33 P/E ratio. The firm owns and operates CBOE primary options market, which offers trading in listed options through a single system that integrates electronic trading and traditional open outcry trading on its trading floor in Chicago; CFE, an all-electronic futures exchange, which provides futures on the VIX Index, as well as on other products; and C2, an all-electronic exchange that offers trading for listed options.

Investors sentiment decreased to 1.47 in 2017 Q2. Its down 0.27, from 1.74 in 2017Q1. It dropped, as 41 investors sold Cboe Global Markets, Inc. shares while 79 reduced holdings. 73 funds opened positions while 136 raised stakes. 88.78 million shares or 4.89% more from 84.64 million shares in 2017Q1 were reported. Renaissance Techs Lc holds 0.51% or 4.37M shares. Bokf Na holds 20,130 shares or 0.06% of its portfolio. Credit Suisse Ag has invested 0.02% in Cboe Global Markets, Inc. (NASDAQ:CBOE). Oregon Pub Employees Retirement Fund holds 0.01% or 9,646 shares in its portfolio. Green Square Ltd Llc has 6,794 shares. West Oak Capital Ltd Company accumulated 300 shares or 0% of the stock. Usa Financial Portformulas has invested 0.25% in Cboe Global Markets, Inc. (NASDAQ:CBOE). Fernwood Inv Management Llc holds 0.47% or 7,100 shares. Chase Invest Counsel accumulated 18,982 shares or 0.84% of the stock. Advisory Limited Company accumulated 419 shares. Sei Invs Co invested in 0.07% or 199,103 shares. Sumitomo Mitsui invested 0.05% of its portfolio in Cboe Global Markets, Inc. (NASDAQ:CBOE). Roberts Glore & Il invested in 4,205 shares. Barclays Pcl owns 31,610 shares for 0% of their portfolio. Commonwealth Of Pennsylvania Public School Empls Retrmt owns 0.01% invested in Cboe Global Markets, Inc. (NASDAQ:CBOE) for 6,826 shares.

Among 20 analysts covering CBOE Holdings Inc (NASDAQ:CBOE), 8 have Buy rating, 2 Sell and 10 Hold. Therefore 40% are positive. CBOE Holdings Inc had 65 analyst reports since August 4, 2015 according to SRatingsIntel. On Monday, November 2 the stock rating was maintained by JP Morgan with “Neutral”. The firm earned “Buy” rating on Tuesday, October 11 by Evercore. The company was maintained on Friday, September 9 by Deutsche Bank. The company was maintained on Monday, June 26 by Jefferies. The stock of Cboe Global Markets, Inc. (NASDAQ:CBOE) earned “Buy” rating by Buckingham Research on Tuesday, September 27. Zacks upgraded the shares of CBOE in report on Tuesday, August 25 to “Hold” rating. RBC Capital Markets downgraded the stock to “Sector Perform” rating in Tuesday, September 27 report. The firm earned “Outperform” rating on Wednesday, December 9 by RBC Capital Markets. Goldman Sachs upgraded the shares of CBOE in report on Wednesday, January 4 to “Buy” rating. RBC Capital Markets maintained Cboe Global Markets, Inc. (NASDAQ:CBOE) on Monday, May 2 with “Outperform” rating.

Investors sentiment decreased to 0.64 in 2017 Q2. Its down 0.09, from 0.73 in 2017Q1. It fall, as 8 investors sold CUI Global, Inc. shares while 7 reduced holdings. 5 funds opened positions while 6 raised stakes. 11.68 million shares or 0.76% less from 11.77 million shares in 2017Q1 were reported. Oppenheimer reported 11,264 shares stake. Eidelman Virant Cap reported 37,127 shares stake. Croft reported 0.17% in CUI Global, Inc. (NASDAQ:CUI). California Pub Employees Retirement has invested 0% in CUI Global, Inc. (NASDAQ:CUI). Brown Advisory stated it has 0% in CUI Global, Inc. (NASDAQ:CUI). Barclays Public Limited Company invested in 0% or 736 shares. Retail Bank Of Ny Mellon reported 19,933 shares. 37,400 are owned by Renaissance Technology Lc. Wells Fargo Mn holds 0% of its portfolio in CUI Global, Inc. (NASDAQ:CUI) for 3,500 shares. Heartland Incorporated has invested 0.55% in CUI Global, Inc. (NASDAQ:CUI). Vanguard Group Inc Inc Inc stated it has 859,350 shares. First Eagle Invest Mngmt Ltd Liability Corp owns 0.02% invested in CUI Global, Inc. (NASDAQ:CUI) for 2.40M shares. Van Den Berg Mgmt I reported 0.08% stake. Dimensional Fund Advisors Lp, Texas-based fund reported 27,808 shares. New York-based Clear Harbor Asset Management Lc has invested 0.84% in CUI Global, Inc. (NASDAQ:CUI).

Analysts await CUI Global, Inc. (NASDAQ:CUI) to report earnings on March, 13. They expect $-0.08 earnings per share, up 33.33% or $0.04 from last year’s $-0.12 per share. After $-0.07 actual earnings per share reported by CUI Global, Inc. for the previous quarter, Wall Street now forecasts 14.29% negative EPS growth.

CUI Global, Inc., through its subsidiaries, engages in the acquisition, development, and commercialization of power and electromechanical components worldwide. The company has market cap of $76.98 million. The firm operates through two divisions, Power and Electro-Mechanical, and Energy. It currently has negative earnings. The Power and Electromechanical segment offers components, including connectors, speakers, buzzers, test and measurement devices, and control solutions comprising encoders and sensors; and power solutions, such as Novum and ICE Block that addresses power and related accessories to consumer electronics, medical, and defense industries.

Among 4 analysts covering CUI Global (NASDAQ:CUI), 4 have Buy rating, 0 Sell and 0 Hold. Therefore 100% are positive. CUI Global has $12.0 highest and $7.0 lowest target. $9.75’s average target is 259.78% above currents $2.71 stock price. CUI Global had 5 analyst reports since December 23, 2015 according to SRatingsIntel. The firm earned “Buy” rating on Wednesday, May 11 by Dougherty & Company. The stock of CUI Global, Inc. (NASDAQ:CUI) has “Buy” rating given on Friday, November 11 by Dougherty & Company. The firm earned “Buy” rating on Thursday, August 10 by H.C. Wainwright. The firm has “Buy” rating given on Wednesday, December 23 by Rodman & Renshaw.

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Cboe Global Markets, Inc. (CBOE) Touches $127.66 High on Dec, 12; Teacher Retirement System …

The stock of Cboe Global Markets, Inc. (NASDAQ:CBOE) reached all time high today, Dec, 12 and still has $135.32 target or 6.00% above today’s $127.66 share price. This indicates more upside for the $14.48 billion company. This technical setup was reported by Barchart.com. If the $135.32 PT is …

Teacher Retirement System Of Texas increased Netease Inc (NTES) stake by 7.44% reported in 2017Q2 SEC filing. Teacher Retirement System Of Texas acquired 1,434 shares as Netease Inc (NTES)’s stock declined 3.53%. The Teacher Retirement System Of Texas holds 20,708 shares with $6.23 million value, up from 19,274 last quarter. Netease Inc now has $44.20B valuation. The stock decreased 2.34% or $8.07 during the last trading session, reaching $336.7. About 483,975 shares traded. NetEase, Inc. (NASDAQ:NTES) has risen 77.85% since December 12, 2016 and is uptrending. It has outperformed by 61.15% the S&P500.

The stock of Cboe Global Markets, Inc. (NASDAQ:CBOE) reached all time high today, Dec, 12 and still has $135.32 target or 6.00% above today’s $127.66 share price. This indicates more upside for the $14.48 billion company. This technical setup was reported by Barchart.com. If the $135.32 PT is reached, the company will be worth $869.04 million more. The stock increased 1.04% or $1.31 during the last trading session, reaching $127.66. About 338,361 shares traded. Cboe Global Markets, Inc. (NASDAQ:CBOE) has risen 34.37% since December 12, 2016 and is uptrending. It has outperformed by 17.67% the S&P500.

Teacher Retirement System Of Texas decreased Investors Bancorp Inc New (NASDAQ:ISBC) stake by 73,871 shares to 153,668 valued at $2.05M in 2017Q2. It also reduced Lowes Cos Inc (NYSE:LOW) stake by 33,890 shares and now owns 1.10 million shares. Exxon Mobil Corp (NYSE:XOM) was reduced too.

Among 18 analysts covering NetEase (NASDAQ:NTES), 11 have Buy rating, 4 Sell and 3 Hold. Therefore 61% are positive. NetEase had 39 analyst reports since August 12, 2015 according to SRatingsIntel. The stock of NetEase, Inc. (NASDAQ:NTES) earned “Buy” rating by Nomura on Friday, November 17. The stock of NetEase, Inc. (NASDAQ:NTES) earned “Buy” rating by Jefferies on Monday, July 17. The stock of NetEase, Inc. (NASDAQ:NTES) has “Buy” rating given on Thursday, May 12 by Nomura. As per Wednesday, August 12, the company rating was upgraded by Vetr. Bernstein initiated the stock with “Underperform” rating in Wednesday, January 11 report. The firm has “Overweight” rating given on Thursday, February 25 by JP Morgan. Zacks downgraded the shares of NTES in report on Tuesday, August 25 to “Hold” rating. The firm has “Outperform” rating given on Wednesday, September 28 by Macquarie Research. Standpoint Research upgraded the stock to “Buy” rating in Monday, January 9 report. Morgan Stanley maintained the stock with “Overweight” rating in Thursday, November 10 report.

Analysts await Cboe Global Markets, Inc. (NASDAQ:CBOE) to report earnings on February, 5. They expect $0.86 EPS, up 36.51% or $0.23 from last year’s $0.63 per share. CBOE’s profit will be $97.57 million for 37.11 P/E if the $0.86 EPS becomes a reality. After $0.89 actual EPS reported by Cboe Global Markets, Inc. for the previous quarter, Wall Street now forecasts -3.37% negative EPS growth.

CBOE Holdings, Inc., through its subsidiaries, operates as an options exchange in the United States. The company has market cap of $14.48 billion. It offers marketplaces for trading options on various market indexes; futures on the VIX Index; options on the stocks of individual firms comprising equity options; and options on other exchange-traded products that include ETP options, such as exchange-traded funds and exchange-traded notes, as well as other index options. It has a 68.23 P/E ratio. The firm owns and operates CBOE primary options market, which offers trading in listed options through a single system that integrates electronic trading and traditional open outcry trading on its trading floor in Chicago; CFE, an all-electronic futures exchange, which provides futures on the VIX Index, as well as on other products; and C2, an all-electronic exchange that offers trading for listed options.

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Smooth launch of bitcoin futures on Cboe Global Markets could pave the way for more …

“We saw pretty volatile overnight markets, a lot of price moves, but everything worked as it should,” Tilly said. Cboe was the first U.S.-based, traditional exchange to offer bitcoin futures, and its widely anticipated launch on Sunday evening was seen as a litmus test for more mainstream adoption of the …

The generally smooth launch of bitcoin futures on Cboe Global Markets could pave the way for other cryptocurrency-related products like options and ETFs, the head of the exchange operator said in an interview on Monday.

Virtual currency Bitcoin tokens Image: Reuters

Virtual currency Bitcoin tokens Image: Reuters

It may take U.S. regulators a bit longer to warm to the idea of a proliferation of products and securities related to digital currencies, but Cboe Chief Executive Ed Tilly said this weekend’s debut should support progress toward that.

“We will be building confidence in the coming months, and stay tuned, there are more to come,” he said. Chicago-based Cboe operates markets in options, futures, equities and currencies.

The most-active contract exhibited the volatility that has become bitcoin’s hallmark, surging 20 percent at one point to trigger a five-minute trading halt.

“We saw pretty volatile overnight markets, a lot of price moves, but everything worked as it should,” Tilly said.

Cboe was the first U.S.-based, traditional exchange to offer bitcoin futures, and its widely anticipated launch on Sunday evening was seen as a litmus test for more mainstream adoption of the digital asset.

By early afternoon on Monday, nearly 3,700 contracts had traded hands, with nearly 20 trading firms participating. Most of the activity was concentrated in the January, or front-month, contract XBTF8.

“Just about all of the participants who had shown us readiness late last week and even into this weekend, showed up,” Tilly said.

On the heels of the launch, three fund managers, REX Shares LLC, Van Eck Associates Corp and First Trust Advisors LP, went back to the U.S. Securities and Exchange Commission seeking permission to launch bitcoin exchange-traded funds.

The SEC has denied or tabled all bitcoin ETF proposals so far, but proponents think a successful debut of futures could breathe new life into the plans. Cboe plans to wait until there have been a couple of settlements on the one-month futures contracts before it moves forward with any new crypto-derivative products, said Tilly.

Those could include options on futures contracts and on ETFs, Tilly said. Cboe has also appealed a ruling by the SEC that blocked a Cboe-listed bitcoin ETF proposed by the Gemini bitcoin exchange, which Cboe uses for the final settlement price of its bitcoin futures contracts.

Bitcoin is the largest of the hundreds of crypto-currencies that have flooded the over-the-counter market in recent years, and as demand for other digital coins rises, futures on those coins will follow, Tilly said. “I do see other currencies going forward.”

Let’s Do it Again

Bitcoin has almost tripled in value in the past month and is up around 15-fold this year. That volatility had some worried about how Cboe’s bitcoin futures would trade.

Just after the opening tick of $15,000 at 6 p.m. Eastern time on Sunday, the price of the contract surged 10 percent higher. Cboe had the option of halting trading at that point, but allowed it to continue because trading was orderly, Tilly said.

Following another 10 percent climb, Cboe halted trading in the futures contract for five minutes.

“Markets came back in line and we reopened in an orderly fashion,” said Tilly. “We could not have been more pleased with the way that played out last night.”

Also around the time trading started, Cboe’s website, which is not connected to the company’s trading engine, briefly went down. Tilly said the outage was the result of traffic that was around six times more than the site receives on an average weekday.

Never has a new product launch at Cboe exceeded the level of interest and anticipation around bitcoin futures, he said. “It’s just been so exciting for us to bring this to market. I told the team last night, I said, ‘let’s do this every Sunday! This is a ton of fun.’”

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Ride The Bitcoin Craze With A Low Risk Pick-And-Shovel Play

Bitcoin’s popularity and trade volumes have soared into a euphoric state, creating enormous risk in trading Bitcoin directly. Exchange trading companies are teed up to profit from this hype with minimal risk to any collapse in the currency. Cboe Global Markets Inc., one of the largest exchange holding …

Pick and Shovel Play

During the California Gold Rush from 1848 to 1855, nearly 300,00 people migrated to California in hopes of hitting the gold jackpot. Most spent their savings chasing dreams in the high-risk mining operations and went bankrupt. One business man, however, became California’s first millionaires. He hyped the goldrush in his newspaper, the California Star, before profiting by selling picks and shovels to overeager dreamers.

History tends to repeat itself.

Fast forward today, and a craze has broken out over Bitcoin. Every hour a new article comes out projected Bitcoin’s meteoric rise. Some have even started noticing the energy consumption required to “mine” a bitcoin on a global level as trading volumes have increased. This has setup a perfect opportunity to capitalize on the Bitcoin frenzy by “mining the miners” – investing in the exchanges that charge fees for every Bitcoin trade.

The Company

Cboe Global Markets Inc. (CBOE) will become the first futures exchange for the crypto currency. While there’s plenty of value to being first to market (separate discussion), I’ll focus on the current valuation of CBOE’s current stock price using a discounted cash flow model.

CBOE makes its money as an exchange, meaning it profits from every trade it processes. The company currently possesses 20% of the U.S. equity market in trade volumes and operates in European equities, options, futures, and Global FX trading. The stock is up 63% this year as the company continues to launch new ETF’s and exchanges. The below graphic was taken from CBOE’s Q3 earnings slides and depicts CBOE’s high share of new ETF launches. The company has created a solid trading base for itself and should continue to dominate as it adds new exchanges and launches new ETFs.

Initial Exchange Results

By the Monday morning following the Bitcoin exchange launch on CBOE, nearly 3,000 contracts had exchanged hands to a limited number of brokers who agreed to test out the product. On-lookers visiting the CBOE exchange site have already cause two crashed from circuit breaker overloads. Thus far. interest for Bitcoin futures has exceeded CBOE’s expectations.

Since CBOE profits from every trade performed through its Bats’ trading platform, this bodes well for potential revenue gains from Bitcoin exchanges. Zennon Kapron from the consulting firm Kapronasia commented on the initial interest and volumes:

It is rare that you see something more volatile than bitcoin, but we found it: bitcoin futures.

Valuation

While revenues have exploded this year, this analysis assumes a 4Q17 in line with management’s expectations and 4% annual growth thereafter. In addition, any revenue gains from CBOE’s Bitcoin Exchange are excluded from the current valuation. This eliminates the risk of the Bitcoin Exchange launch flopping. Therefore, any upside may be added on top of the current stock valuation.

A slight gain to 2Q17 and 3Q17 EBITDA margins are assumed on future projections as CBOE completes its transition onto its more efficient and scalable Bats’ trading platform by February of 2018.

Image Source: Discounted Cash Flows spreadsheet developed by author.

Image Source: Discounted Cash Flows spreadsheet developed by author.

Upside

  • Bitcoin contributes incrementally to CBOE’s EBITDA cash flows
  • Market trade volumes increase with an increase in volatility. Volatility is currently near a 5-yr low – see CBOE’s VIX
  • CBOE continues to launch new ETF’s and exchanges

Risk

  • Interest rates rise faster than expected sending CBOE’s WACC higher
  • CBOE is forced to reduce exchange fees to maintain market share
  • Passive investing continues to gain greater interest, reducing trade volumes
  • CME’s launch of its own Bitcoin exchange eats into CBOE’s market share

The following sensitivity analysis accounts for potential upside and risk to WACC and revenues.

Image Source: Discounted Cash Flows spreadsheet developed by author

Conclusion

CBOE’s currently market price of $125 is in line with a discounted cash flow analysis assuming 4% revenue growth and slight improvement to EBITDA margins from efficiency gains with its new Bats’ trading system. The valuation excludes any upside to the new Bitcoin Exchange. Bitcoin may offer an incremental uptick in both revenues and EBITDA cash flows and therefore raise the current market valuation. In addition, CBOE is a great hedge against market volatility should things get choppy into the new year.

In conclusion, CBOE appears to be an attractive buy in today’s market and a great play on the Bitcoin craze with little downside risk. More conservative investors may take a wait and see approach and look for management to provide some insight into success of the Bitcoin exchange during its Q4 earnings call on February 5, 2018.

Disclosure:I am/we are long CBOE.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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