Cboe Global Markets, Inc. (NASDAQ: NYSE:CBOE) is set to release its Q3 2023 earnings on November 3, following a four-quarter streak of surpassing earnings with an average surprise of 3.07%. The expected performance boost is attributed to increased trading volumes and a surge in demand for data and access solutions.
The company projects Q3 revenues at $478 million, marking an 8.2% year-over-year increase, according to the Zacks Consensus Estimate. This anticipated growth in revenue is due to a rise in transaction fees, market data fees, access and capacity fees, and regulatory fees. Additionally, recent acquisitions are expected to further enhance the top line.
A significant portion of the projected revenue growth is due to higher proprietary market data fees and access and capacity fees. Market data revenues from Options, Europe, Asia Pacific segments, and Cboe Canada are expected to increase, contributing an estimated $72 million to market data revenues. Proprietary products like VIX futures and SPX options are also expected to provide a boost to Cboe Global's performance.
Further supporting the bottom line are anticipated share buybacks. However, an interest expense of $12-$13 million is projected for Q3. The Zacks Consensus Estimate predicts the Q3 EPS at $1.84, indicating a 5.7% year-over-year increase.
The growth in multi-listed options trading, a 7% rise in market data fees, and an 8.5% increase in access and capacity fees estimated at $90.2 million, alongside a rise in subscribers and improved physical port fees are also expected to contribute positively to Cboe Global's Q3 earnings.
InvestingPro Insights
Based on real-time data from InvestingPro, Cboe Global Markets, Inc. (NASDAQ: CBOE) has a P/E Ratio (Adjusted) of 26.09 as of Q2 2023, indicating that the stock may be undervalued given its earnings growth. The company's Gross Profit Margin stands at 47.2%, suggesting a strong ability to translate sales into profits. Furthermore, the 3 Month Price Total Return as of the end of 2023 was 20.42%, pointing to a strong return over the last quarter.
InvestingPro Tips reveals that Cboe yields a high return on invested capital and has raised its dividend for 8 consecutive years. These factors, coupled with the fact that net income is expected to grow this year, make Cboe an attractive option for investors seeking both growth and income.
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