The case for & against
Bull & Bear analysis
Cboe Global Markets, Inc. (NASDAQ: CBOE) is a leading global exchange holding company that specializes in the trading of options, futures, and cash equities. The company has established a strong position in the derivatives market, particularly through its proprietary index options and multi-list offerings. Cboe is actively adapting to the dynamic financial landscape by expanding its product suite, including the recent launch of event contracts and prediction markets, targeting both institutional and retail traders. The company is strategically positioned to capitalize on the growing appetite for derivatives, amidst trends toward increased trading flexibility and innovation across the financial markets.
Bull says
- ↑Q1 2026 net revenue of $729 M (+29% YoY) and adjusted EPS of $3.70 (+48% YoY) demonstrate strong core performance.
- ↑Derivatives segment revenue up 32% YoY, driven by institutional engagement and elevated market volatility.
- ↑Launched Cboe Predicts prediction markets to capture growing retail and institutional trading interest.
- ↑Maintains $2.1 B cash with 0.8 leverage ratio, enabling share repurchases of $121 M in Q1.
- ↑High liquidity and positive analyst revision momentum support earnings growth visibility.
- ↑Positive exposure to commodity price swings could benefit revenue in inflationary environments.
Bear says
- ↓Shares trade ~3% above fair value, and below-average earnings yield suggests valuation risk.
- ↓Forecasted 3% annualized net revenue decline from exiting non-core businesses and 20% headcount cuts.
- ↓Increasing competition from low-cost exchanges threatens derivatives market share.
- ↓Revenue dependency on volatility exposes results to swings in trading activity.
- ↓Weak profitability factors and elevated leverage increase risk under rising interest rates.
- ↓Extreme stock price volatility could drive large share price swings.
Investment themes with CBOE
Debt and equity trading fueling economic growth
Earnings Call · Q1 2026 · Mgmt. Guidance
Transcript signals
Bull points
- During the first quarter, CBOE grew net revenue 29% year over year to a record $729 million, and adjusted diluted EPS increased an exceptional 48% to a record $3.70.
- The robust results in the first quarter were, again, broad-based, driven by record net revenue in every major category at CBOE, and double-digit net revenue growth in four of our five company segments.
- Index options net transaction and clearing fees revenue drove the upside, increasing a robust 35% as our proprietary SPX options set another quarterly record with average daily volume increasing 34% year over year to 4.9 million contracts.
Bear points
- Our earlier actions to sell, wind down, and optimize certain businesses, combined with today's additional strategic realignment changes, are expected to reduce our workforce by approximately 20%.
- we continue to anticipate that these actions will lead to an approximate 3% annualized reduction in net revenue compared to 2025, primarily driven by our strategic decision to exit or scale back non-core and lower return businesses.
- we now expect our strategic realignment to deliver an even greater reduction, approximately 12 to 14% on an annualized basis compared to 2025, translating to savings in the range of $100 to $120 million.