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For informational purposes only. Not investment advice.

Cboe Global Markets

CBOE

FAVORABLE

May 27, 2026

Research Conclusion

HOLD/ACCUMULATE at ~$235. Cboe is the dominant US options exchange (SPX, VIX franchises) with high-margin Data Vantage segment (20% of net revenue; +10-11% organic). At 20.4x FY2026E adj EPS, the market gives partial credit for the Data Vantage SaaS-like attributes. PWFV ~$295-300 (+25-28%); base case $319 (+36%); bear case $192 (-18%). The thesis pivots on whether 0DTE options momentum is sustained + Data Vantage continues mix shift to drive multiple re-rating from 20x to 22-24x.

Company Overview & Moat Assessment

Cboe Global Markets is the dominant US options exchange, operator of SPX (S&P 500 options) and VIX volatility products franchises. Net revenue $2.43B FY2025 (+17% YoY) across four streams: Options/Derivatives (~62%), Data Vantage market data + analytics SaaS (~20%, +10-11% organic), Cash Equities (~12%), and Futures (~6%). The 0DTE (zero-day-to-expiration) options boom has been a structural step-change in options volumes. CEO Fred Tomczyk. Operating margin 58% with expansion trajectory. Cboe Digital is a small crypto venture (managed).

▲ Bull Case

  • ◆Data Vantage reaches 25%+ of net revenue by FY2028: SaaS-like growth at 60%+ margins; financial data peers (MSCI, FactSet) trade 25-35x; blended multiple expands toward 22-24x.
  • ◆0DTE international expansion adds $200-300M revenue annually: Asian + European retail/institutional flow into SPX/VIX; 24-hour trading enables capture; high-margin incremental revenue.
  • ◆Operating margin expands to 61%: Scale leverage on Data Vantage + options + cost discipline; FCF $2.75B+ by FY2030.

▼ Bear Case

  • ◆VIX mean-reverts to 12-15 average: Options volumes decline 10-15%; FY2027 EPS ~$11 vs. $13 base; multiple compresses to 16x = $176.
  • ◆SEC restricts retail 0DTE options: Regulatory action limits retail flow; options revenue -20%+; structural EPS hit.
  • ◆Data Vantage growth slows below 8%: Bull re-rating thesis fails; multiple stays 18-20x.
Primary Debate on Wall Street

“Whether 0DTE represents permanent retail behavior shift (bull) or cyclical volatility/sentiment-driven boom (bear). Data Vantage mix shift is acknowledged but pace debated.”

Top Catalysts
  • ◆Q2 2026 ADV trajectory (Jul 2026): SPX 0DTE volume trend
  • ◆Data Vantage organic growth sustaining +10%+ (quarterly)
  • ◆International 0DTE expansion — Asian/EU adoption metrics (FY2026-2027)
  • ◆Regulatory news — SEC 0DTE rulemaking (ongoing)
  • ◆VIX level as daily volume driver
Top Risks
  • ◆VIX mean reversion (MEDIUM probability / HIGH impact) — bear case driver
  • ◆SEC 0DTE restriction (LOW-MEDIUM probability / HIGH impact) — structural EPS hit
  • ◆Data Vantage growth slowdown below 8% (LOW-MEDIUM probability / MEDIUM impact) — re-rating thesis fails
  • ◆Competitive options entrants, e.g. NDX 0DTE share >20% (LOW probability / LOW impact) — moats currently strong
  • ◆Cboe Digital impairment (LOW probability / LOW impact) — small position

Full Memo Continues

5 more sections, locked

  • ●
    Valuation Range & DCF
    Base/bull/bear fair-value range, WACC, terminal growth, sensitivity to revenue + margin assumptions.
  • ●
    Risk/Reward Assessment
    Position-sizing framework with explicit upside/downside skew and entry conditions.
  • ●
    Management & Capital Allocation
    Multi-year capital-allocation track record, incentive alignment, and management readout.
  • ●
    Monitoring Framework
    What to watch each quarter — leading indicators and inflection signals tracked by the analyst.
  • ●
    Unresolved Questions
    Open analyst questions and follow-up research items — the depth signal.

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Margin of Insight

For informational purposes only. Not investment advice.