CME Group Inc. (CME)
Valuation Overview•Is CME Group Inc. Overvalued or Undervalued?
The market is pricing the stock in line with historical averages, assuming steady-state growth.
High-quality fundamentals with a strong composite quality score of 86/100, backed by robust profitability and solvency.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Elite compounder with fortress-level fundamentals across every core pillar.
Wall Street is highly bullish, projecting significant upside with steady expected earnings growth. This is paired with healthy capital returns, anchored by a strong, well-covered dividend yield.
CME exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins. This is backed by a fortress balance sheet, holding significant net cash ($666M) and minimal debt risk.
The company maintains stable top-line performance paired with robust earnings compounding (14.7% EPS 3Y CAGR). This growth is supported by elite operational efficiency, sustaining an impressive 65.6% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.9B | +6.4% | — | — | +7.0% | |
| EBITDA | $1.3B | — | +10.1% | — | — | |
| Net Income | $1.2B | +14.7% | +14.5% | — | +12.5% | |
| EPS (Diluted) | $3.18 | +15.4% | +14.7% | +13.7% | +11.7% | |
| Free Cash Flow | $1.3B | +16.6% | +12.2% | +10.7% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 86.3% | 85.8% | 84.9% | 84.2% |
| Operating Margin | 65.6% | 63.5% | 61.4% | 59.9% |
| Net Margin | 62.8% | 59.1% | 57.4% | 57.3% |
| FCF Margin | 64.4% | 61.2% | 58.2% | 54.0% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $3.34 | $3.36 | +0.6% | ||
| Q1'26 | $2.75 | $2.77 | +0.7% | ||
| Q4'25 | $2.63 | $2.68 | +1.9% | ||
| Q3'25 | $2.91 | $2.96 | +1.7% | ||
| Q2'25 | $2.80 | $2.80 | +0.0% | ||
| Q1'25 | $2.46 | $2.52 | +2.4% | ||
| Q4'24 | $2.66 | $2.68 | +0.8% | ||
| Q3'24 | $2.53 | $2.56 | +1.2% |
Total return is -5.3% (1Y), lagging the benchmark by -30.3%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -5.4% | -14.7% | — |
| 1Y | -5.3% | -30.3% | +4.1% |
| 3YCAGR | +15.0% | -3.7% | +17.3% |
| 5YCAGR | +6.9% | -5.8% | +22.5% |
| 10YCAGR | +13.1% | -0.3% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about CME Group Inc. (CME) valuation, health, and returns.
CME Group Inc. is estimated to be fair under our discounted cash flow framework. relative multiples indicate the stock is Fair versus peers compared to industry peers. trading near fair value (DCF: $250.72)
CME Group Inc. has multiple valuation anchors: DCF Intrinsic Value: $250.72 | Peer Relative Fair Value: $235.49 | Wall Street Analyst Target: $320.67 (implying +30.2% upside). A convergence of these signals offers higher conviction.
CME Group Inc. displays excellent financial health with a composite quality score of 86/100, supported by a Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 10.2%.
CME Group Inc. pays a 4.4% dividend yield, covered by a 97% payout ratio with 15 years of growth, supplemented by a 0.3% buyback yield.
CME Group Inc.'s current growth trajectory is Decelerating. The company achieved +6.4% 1Y revenue growth and +15.4% 1Y EPS growth, compared to its 3Y revenue CAGR of N/A.
Wall Street consensus is Hold based on 36 analysts, beating EPS expectations in 92% of recent quarters with a 4-quarter streak. The consensus price target represents a +30.2% change from current levels.
Investment risks for CME Group Inc. include: -24.5% 1-year max drawdown, stretched payout ratio. Volatility risk is characterized by a beta of -0.26x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.