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CME Group (CME)
NASDAQ:CME
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CME Group
(NASDAQ:CME)82Outperform
Positive Factors
Financial Performance
Raising 2025e Adj. EPS by +3.6% to $10.97.
Market Position
CME is currently delivering approximately $60 billion of margin efficiency on a daily basis.
Negative Factors
Market Competition
FMX launched as CME’s first competitor in interest rate futures, but is still in its initial stages and plans to launch treasury futures in 1Q25.
CME Group (CME) vs. S&P 500 (SPY)
Market Cap
$90.80B
Dividend Yield4.13%
Average Volume (3M)1.78M
Price to Earnings (P/E)26.1
Beta (1Y)0.23
Revenue Growth9.88%
EPS Growth9.18%
CountryUS
Employees3,565
SectorFinancial
Sector Strength93
IndustryCapital Markets
Share Statistics
EPS (TTM)9.67
Shares Outstanding360,354,200
10 Day Avg. Volume1,922,160
30 Day Avg. Volume1,779,698
Financial Highlights & Ratios
PEG Ratio2.84
Price to Book (P/B)N/A
Price to Sales (P/S)14.81
Price to Cash Flow (P/CF)22.30
P/FCF Ratio22.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$254.38Price Target Upside-0.04% Downside
Rating ConsensusHold
Number of Analyst Covering13
CME Group Business Overview & Revenue Model
Company DescriptionCME Group Inc., formerly known as Chicago Mercantile Exchange Holdings Inc, is the world's leading derivatives marketplace, with it offering a wide range of futures and options products for risk management. These include equity indexes, interest rates, agricultural commodities, foreign exchange, energy, and metals. The company also offers clearing and settlement services for exchange-traded contracts, as well as for cleared over-the-counter derivatives transactions. It also provides a wide range of market data services such as live quotes, delayed quotes, historical data service and market reports.
How the Company Makes MoneyCME Group makes money primarily through transaction fees generated from trading activity on its platforms. This includes fees for trading futures and options contracts, as well as clearing and settlement services. Additionally, the company earns revenue from market data services by providing real-time and historical data products to traders and financial institutions. CME Group also benefits from licensing its market data and indices for use in financial products. The company has established significant partnerships and strategic alliances with other exchanges and financial institutions worldwide, further enhancing its revenue streams by expanding its product offerings and market reach.
CME Group Financial Statement Overview
Summary
CME Group demonstrates robust financial health with strong revenue and profit margins, effective cash flow management, and conservative leverage. Notable strengths include a 9.90% revenue increase and solid profitability margins. However, the balance sheet could benefit from a higher equity ratio.Income Statement
CME Group has demonstrated strong revenue growth with a 9.90% increase in 2024 compared to 2023, indicating robust demand and effective business strategies. The gross profit margin remains high at approximately 86.13% for 2024, showcasing efficient cost management. The net profit margin of 56.79% reflects solid profitability. Both EBIT and EBITDA margins are strong, at 64.13% and 75.24% respectively, underlying operational efficiency and effective cost control.90
Very Positive
Balance Sheet
The balance sheet reflects a debt-to-equity ratio of 0.13, indicating conservative leverage and strong equity base. The return on equity (ROE) is impressive at 13.14%, showcasing effective use of equity to generate profits. However, the equity ratio stands at 19.27%, suggesting a relatively lower proportion of equity financing compared to total assets. Overall, the balance sheet is stable but could benefit from a higher equity ratio.75
Positive
Cash Flow
The cash flow statement shows a healthy free cash flow growth rate of 9.27% from 2023 to 2024, indicating strong cash generation capabilities. Operating cash flow to net income ratio is 1.06, reflecting adequate cash flow generation relative to net income. The free cash flow to net income ratio is 1.06, underscoring efficient conversion of income into cash. Overall, cash flow management appears robust with positive growth trends.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 6.13B | 5.58B | 5.02B | 4.69B | 4.88B | Gross Profit |
| 5.28B | 4.75B | 4.27B | 3.85B | 4.03B | EBIT |
| 3.93B | 3.44B | 3.02B | 2.65B | 2.64B | EBITDA |
| 5.04B | 3.79B | 3.37B | 2.99B | 3.14B | Net Income Common Stockholders |
| 3.53B | 3.23B | 2.69B | 2.64B | 2.11B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.01B | 3.02B | 2.82B | 2.95B | 1.73B | Total Assets |
| 137.45B | 129.71B | 174.18B | 196.78B | 124.66B | Total Debt |
| 3.43B | 3.88B | 3.44B | 3.45B | 3.44B | Net Debt |
| 535.60M | 971.90M | 718.30M | 610.20M | 1.81B | Total Liabilities |
| 110.96B | 102.97B | 147.30B | 169.38B | 98.31B | Stockholders Equity |
| 26.49B | 26.74B | 26.88B | 27.40B | 26.32B |
| Cash Flow | Free Cash Flow | |||
| 3.69B | 3.38B | 2.97B | 2.28B | 2.52B | Operating Cash Flow |
| 3.69B | 3.45B | 3.06B | 2.40B | 2.72B | Investing Cash Flow |
| -82.60M | 20.90M | -489.80M | 58.40M | -175.50M | Financing Cash Flow |
| 5.08B | -48.34B | -25.38B | 69.91B | -2.46B |
CME Group Technical Analysis
Positive
254.48
Price Trends
239.03
Positive
231.15
Positive
215.34
Positive
Market Momentum
4.35
Negative
62.53
Neutral
66.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CME, the sentiment is Positive. The current price of 254.48 is above the 20-day moving average (MA) of 248.41, above the 50-day MA of 239.03, and above the 200-day MA of 215.34, indicating a bullish trend. The MACD of 4.35 indicates Negative momentum. The RSI at 62.53 is Neutral, neither overbought nor oversold. The STOCH value of 66.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CME.
CME Group Risk Analysis
CME Group disclosed 28 risk factors in its most recent earnings report. CME Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CME Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $90.80B | 26.05 | 13.26% | 4.13% | 9.88% | 9.18% | |
79 Outperform | $22.13B | 29.30 | 17.87% | 1.14% | 8.51% | 1.13% | |
77 Outperform | $97.59B | 35.52 | 9.94% | 1.04% | 15.32% | 14.02% | |
75 Outperform | $47.14B | 42.50 | 9.98% | 1.19% | 21.96% | -8.37% | |
73 Outperform | $7.46B | 27.19 | 19.74% | 1.53% | 9.06% | 6.10% | |
70 Outperform | $44.08B | 40.41 | -117.99% | 1.16% | 12.94% | -2.54% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% |
* Financial Sector Average
Performance Comparison
CME
CME Group
254.48
44.58
21.24%
CBOE
Cboe Global Markets
212.37
27.01
14.57%
ICE
Intercontinental Exchange
171.61
33.88
24.60%
MKTX
Marketaxess Holdings
195.85
-9.17
-4.47%
MSCI
MSCI
572.99
29.97
5.52%
NDAQ
Nasdaq
78.80
21.72
38.05%
CME Group Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: 5.27% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
CME Group had an outstanding year with record volumes and financial performance across all segments. Despite increased expenses due to strategic investments and regulatory challenges, the overall outlook remains positive with strong growth in international and retail segments.Highlights
Record Year for CME Group
2024 marked the best year in CME Group's history with record volume, averaging 26.9 million contracts daily, a 9% increase year-over-year, with all-time volume records in interest rate, foreign exchange, metals, and agricultural complexes.
Strong International Growth
International business averaged 7.8 million contracts per day, up 14% from 2023, with EMEA volumes up 34% in the commodities business.
Commodities Segment Performance
Metals volume increased by 23%, energy by 17%, and agriculture by 13%, generating a record $1.7 billion in revenue, up 16% versus 2023.
Financial Results and Efficiency
Record revenue of $6.1 billion, a 10% increase from 2023, and a 68.3% adjusted operating margin, with $3.7 billion in adjusted net income and a 10% earnings per share growth.
Retail Business and New Client Acquisition
Retail business remains strong with a 23% increase in new client acquisition year-over-year, contributing significantly to overall growth.
Lowlights
Increased Expenses due to Cloud Migration
Annual adjusted expenses, excluding license fees, were approximately $1.59 billion, including $85 million related to cloud migration.
Regulatory Challenges and Competitive Pressures
Ongoing scrutiny and potential competitive pressures related to clearing and market structure changes in interest rate and US Treasury contracts.
Company Guidance
During the CME Group's fourth quarter 2024 earnings call, the company provided robust guidance for 2025, reflecting their strong performance and strategic growth plans. CME Group reported a record $6.1 billion in revenue for 2024, marking a 10% increase from the previous year, with record revenues across all six asset classes. Adjusted net income totaled $3.7 billion, resulting in a 10% growth in earnings per share. For 2025, CME expects adjusted operating expenses, excluding license fees but including cloud migration expenses, to be approximately $1.65 billion, with capital expenditures around $90 million. The company anticipates a 1% to 1.5% increase in futures and options transaction revenue from fee adjustments, alongside a 2% to 2.5% potential increase in pre-tax income from combined fee changes. Additionally, CME Group is focused on expanding its customer base through strategic partnerships, particularly in the retail sector, and is committed to enhancing risk management solutions amid ongoing global economic uncertainties.CME Group Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
CME Group Updates Clearing House Fee Schedule
Neutral
Dec 11, 2024
CME Group Inc. announced changes to its Clearing House collateral fee schedule and client pricing, as communicated through Advisory Notice 24-383 and Special Executive Report 9482. These changes might affect the company’s operations and influence its market positioning, potentially impacting stakeholders involved in its clearing and trading services.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.