Is Cboe Global Markets Stock Underperforming the Nasdaq?

Cboe Global Markets, Inc. (CBOE), headquartered in Chicago, Illinois, is a global exchange operating company. Valued at $27.6 billion by market cap, the company operates a financial options trading platform that provides cutting-edge trading and investment solutions, including equities, foreign exchange, indices, data and analytics, and trade reporting solutions. 

Companies worth $10 billion or more are generally described as “large-cap stocks,” and CBOE perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the financial data & stock exchanges industry. CBOE's diversified trading solutions across equities, derivatives, FX, and digital assets drive its market strength. Its revenue streams are well-balanced, with significant contributions from cash markets, data solutions, and derivatives, which diversification mitigates risk and positions Cboe to capitalize on various market dynamics.

Despite its notable strength, CBOE slipped 28.2% from their 52-week high of $371.18, achieved on May 19. Over the past three months, CBOE stock has gained 4.7%, outperforming the Nasdaq Composite’s ($NASX) 1.5% gains during the same time frame.

In the longer term, shares of CBOE rose 6.2% on a YTD basis and climbed 12.5% over the past 52 weeks, underperforming NASX’s YTD gains of 13.7% and 18.7% returns over the last year.

CBOE has been trading below its 50-day and 200-day moving averages recently, indicating a bearish trend. 

CBOE has lagged behind the broader market due to dampening volatility dynamics and shifting trading patterns. While broad equity benchmarks like the S&P 500 Index ($SPX) reached sustained highs, periods of reduced equity market uncertainty directly lowered demand for CBOE’s primary revenue drivers, including index options and hedging products. Additionally, rising off-exchange trading activity and increased competition among derivative venues capped market share expansion. Although CBOE saw solid volume in non-equity segments like foreign exchange and dividend expansion, these gains were insufficient to offset the headwinds of a low-volatility environment, leaving the stock trading below key moving averages while the broader market pushed ahead. 

CBOE’s rival, CME Group Inc. (CME) has lagged behind the stock, with a marginal downtick on a YTD basis and 3.3% gains over the past 52 weeks.

Wall Street analysts are cautious on CBOE’s prospects. The stock has a consensus “Hold” rating from the 18 analysts covering it, and the mean price target of $314.27 suggests a potential upside of 17.8% from current price levels.