CBOE — Cboe Global Markets, Inc.

The near-term tape is constructive—Q2 2026 adjusted diluted EPS rose 44.7%, the dividend was raised 19%, and organic revenue guidance was lifted—but Wall Street remains cautious: consensus is Hold, the average 12-month target is only ~$317, and the stock is still well below its May high. The market is encouraged, not euphoric.

Revenue inflected sharply higher in Q2 2026: FMP gross revenue rose from $908.8M in Q3 2023 to $1,442.8M in Q2 2026, with YoY growth re-accelerating from ~6.5% in Q1 2026 to ~23% in Q2 2026 after a mostly high-single-digit 2025. Operating margin expanded to 33.0% in Q2 2026 from 28.9% in Q2 2025, and the TTM operating margin was 35.2%. The main blemish is cash conversion: quarterly operating cash flow swung from +$437M in Q2 2025 to -$503M in Q2 2026, which looks more like a clearing/collateral working-capital swing than a collapse in core profitability, but it is the biggest reason the quantitative score is not higher.

CBOE is not expensive on earnings: P/E TTM was 24.4 versus its 5-year average of 31.8, and forward P/E was about 22.4x using consensus EPS of $14.01. The 0.48 PEG also points to a reasonable growth-adjusted price. P/S of 6.5 versus a 5-year average of 4.6 looks rich, but that ratio is distorted by the gross-revenue treatment of liquidity payments. Overall, valuation is fair—not a bargain, but not stretched versus its own earnings history.

At $313.95, the stock is pricing roughly 22x next-year consensus EPS, below its trailing multiple and its historical average, so it is not discounting aggressive acceleration. If Cboe delivers the raised mid-to-high-teens organic growth and 2027 EPS builds on ~$14, multiple expansion toward 25x would put fair value in the $340-$360 zone. If the negative operating-cash-flow quarter persists or volumes fade, the multiple stays capped and the stock likely remains range-bound with support near $300 and resistance around $330.

Anchored to 2026-08-27: RSI stood at 64.3, above neutral but not yet overbought. Price was 6.25% above the 20-day SMA, 12.81% above the 50-day SMA, and 10.54% above the 200-day SMA, reflecting a short-term uptrend following the earnings rebound. Chasing here is only moderately risky; a pullback toward $300-$305 would offer a better entry than buying at $314.

• Sustained retail and institutional demand for short-dated 0DTE and index options continues to drive Cboe's highest-margin volume.
• Interest-rate expectations and market volatility directly affect hedging and options activity; a macro shock or volatile Fed path is a tailwind for volumes.
• Wage and compensation inflation is pressuring opex; management reaffirmed adjusted opex of $838-$853M and needs cost discipline to protect margins.
• Regulatory scrutiny of market structure, fee models, and listings could pressure pricing or force further portfolio reshaping.
• Portfolio simplification—divesting Cboe Australia and Cboe Canada and exiting non-core listings—refocuses capital but creates transition overhang.

• Q3 2026 earnings, expected late October/early November 2026, will show whether organic growth is tracking the upgraded mid-to-high-teens target.
• Closing of the Cboe Australia and Cboe Canada divestitures could unlock cash, simplify the story, and refresh capital-return capacity.
• New product initiatives, including expanded fixed-income clearing and prediction markets, plus continued 0DTE adoption, could extend the growth runway.
• Another dividend increase or accelerated buyback after divestiture proceeds would support shareholder returns.

• Options volume normalization or a regulatory/policy shock to 0DTE trading would hit the highest-margin segment.
• Cash-flow volatility and earnings quality: Q2 2026 OCF was -$503M, and if that persists, the accrual red flag becomes a real concern.
• Competition and fee compression from other exchanges/ATSs, plus market-structure regulation, could pressure pricing power.
• Multiple compression risk: the current 24x P/E is below the historical average, but if growth slows to single digits after 2026, the re-rating case evaporates.
• Divestiture and restructuring execution risk, including potential stranded costs or earnings dilution from exiting businesses.

Cboe is a high-quality exchange franchise with durable pricing power, strong index-options and data growth, and a more reasonable P/E than its own history. But the deterministic score is Fair, the Street is at Hold, and the latest operating-cash-flow print is a genuine yellow flag, so this is not a high-conviction buy at $314. It is a hold/core-quality position—fairly valued with a favorable structural backdrop rather than a clear bargain or a short.

Calculated by applying a justified forward P/E of 24.6x to consensus next-fiscal-year EPS of $14.014. The multiple is a meaningful discount to Cboe's 5-year average P/E of 31.8, reflecting the negative Q2 OCF/accrual anomaly and cautious Street sentiment, but a premium to the current ~22.4x forward multiple because mid-to-high-teens organic growth and 35.2% operating margins support modest multiple expansion.