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1. Company Snapshot

1.a. Company Description

CME Group Inc., together with its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide.It offers futures and options products based on interest rates, equity indexes, foreign exchange, agricultural commodities, energy, and metals, as well as fixed income products.The company also provides clearing house services, including clearing, settling, and guaranteeing futures and options contracts, and cleared swaps products traded through its exchanges; and trade processing and risk mitigation services.


In addition, the company offers a range of market data services, including real-time and historical data services.It serves professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, governments, and central banks.The company was formerly known as Chicago Mercantile Exchange Holdings Inc.


and changed its name to CME Group Inc.in July 2007.CME Group Inc.


was founded in 1898 and is headquartered in Chicago, Illinois.

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1.b. Last Insights on CME

CME Group's recent performance was driven by strong Q4 2024 earnings and revenue beat, surpassing estimates. Key metrics include a 4.8% year-over-year increase in average daily volume, a 12.6% year-over-year rise in market data and information services fees, and a 14.1% year-over-year increase in clearing and transaction fees. The company's strong results reflect improving revenues and a diverse product portfolio. Additionally, CME's strong free cash flow and ability to invest in its business, despite a low debt-to-equity ratio, indicate a sustainable growth trajectory. The company's ability to generate strong cash flow also supports its potential to consider share buybacks, further benefiting shareholders.

1.c. Company Highlights

2. CME Group's Q3 2025 Earnings: Strong Volume and Revenue Growth

CME Group reported a robust third quarter, with average daily volume reaching 25.3 million contracts, the second-highest in the company's history. Revenue was $1.5 billion, down 3% from the same period last year, while the average rate per contract was $0.702, resulting in clearing and transaction fees of $1.2 billion. Adjusted net income and adjusted diluted earnings per share were $978 million and $2.68 per share, respectively, beating analyst estimates of $2.63 per share. The operating margin was 68.4%, and the company maintained a strong dividend payout, distributing $455 million in the third quarter.

Publication Date: Oct -24

📋 Highlights
  • Record Crypto & Credit Volumes:: Q3 average daily volume hit 25.3M contracts (2nd highest Q3 ever), with crypto, credit futures, and agricultural weekly options all setting records.
  • Revenue & Profitability:: Revenue fell 3% to $1.5B, but adjusted operating income rose to $1.1B (68.4% margin), driven by $203M in market data revenue (+14%).
  • Dividend Payments:: Paid $455M in Q3, $3.5B YTD, with $1.5B from OSTTRA sale proceeds to be used for shareholder returns or strategic investments.
  • 24/7 Crypto Trading & Partnerships:: Plans to launch around-the-clock crypto futures/options early 2026, alongside a FanDuel event-based contract joint venture and Google tokenization collaboration.
  • Collateral & Cost Efficiency:: Cash collateral balances at $134B (46% cash allocation), with $71M in Google partnership costs YTD and $1B+ in BrokerTec Chicago notional trading volume in early months.

Business Highlights

The quarter saw record volumes in crypto, credit futures, and agricultural weekly options, with market data revenue reaching a record $203 million, up 14%. The company announced a partnership with FanDuel to develop and distribute event-based contracts and plans to offer 24/7 trading of cryptocurrency futures and options early next year. The event contracts leverage CME Group's scale and distribution network of over 130 retail partners.

Segment Performance

In energy markets, volumes were down after strong growth earlier in the year, but the outlook remains positive, with year-to-date business in crude and refined products, as well as natural gas, up about 10-11%. The company sold OSTTRA for $1.5 billion, with net proceeds expected to be similar after taxes. The Board will consider uses for the capital, including returning it to shareholders.

Valuation and Growth Prospects

With a P/E Ratio of 25.91 and a Dividend Yield of 3.96%, CME Group's valuation appears reasonable, considering its strong financial performance and growth prospects. Analysts estimate revenue growth of 4.7% next year, driven by the company's expanding product offerings, including cryptocurrency futures and options. The company's ROE of 13.71% and ROIC of 8.68% indicate a strong ability to generate returns for shareholders.

New Initiatives and Outlook

CME Group is making progress in enabling 24/7 trading in crypto markets, with plans to expand this capability to other asset classes. The company is working with Google on tokenizing cash, which will allow for value exchange outside traditional banking hours. The partnership has incurred $71 million in expenses year-to-date, with a total expected expense of $100 million for 2025.

3. NewsRoom

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Dow Jones Today: Major Stock Indexes Little Changed; Weekly Jobless Claims Unexpectedly Fall; Inflation Data on Tap Tomorrow

Dec -04

Source: investopedia.com

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Canadian Metals Announces Closing of $2.4 Million Private Placement

Dec -04

Source: feeds.newsfilecorp.com

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Prediction-Markets Data Is On CNN Now. Expect to See It Just About Everywhere Soon

Dec -04

Source: investopedia.com

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A Major Markets Operator Suffered a Technical Glitch That Left Traders Scrambling. Should You Be Worried?

Dec -03

Source: investopedia.com

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LSEGY or CME: Which Is the Better Value Stock Right Now?

Dec -03

Source: zacks.com

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1832 Asset Management L.P. Sells 695,627 Shares of CME Group Inc. $CME

Dec -03

Source: defenseworld.net

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CME Group Announces Regulatory Approval of New Securities Clearing House

Dec -02

Source: prnewswire.com

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The Next 3 Years Could Make Or Break Portfolios - Here's My Plan

Dec -02

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.10%)

6. Segments

Unclassified Services

Expected Growth: 4.0%

The expected growth rate is slightly below the global revenue growth hypothesis of 4.1% due to potential regulatory headwinds and market volatility. However, the segment is likely to benefit from increasing demand for derivatives and post-trade services, driven by the need for risk management and hedging. The growth rate is expected to be stable, reflecting the segment's diversified revenue streams and critical role in the financial markets. The defensive growth figure is justified by the segment's exposure to market fluctuations.

7. Detailed Products

Futures

A futures contract is a standardized agreement to buy or sell an asset at a predetermined price on a specific date.

Options

An option is a contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price.

Swaps

A swap is a derivative in which two parties agree to exchange a series of cash flows over time based on underlying assets or indices.

FX Products

FX products allow customers to trade currencies and manage foreign exchange risk.

Equity Index Products

Equity index products allow customers to trade on the performance of a particular stock market index.

Agricultural Products

Agricultural products allow customers to trade on the price of agricultural commodities such as corn, soybeans, and wheat.

Energy Products

Energy products allow customers to trade on the price of energy commodities such as crude oil, natural gas, and electricity.

Metal Products

Metal products allow customers to trade on the price of metals such as gold, silver, and copper.

Interest Rate Products

Interest rate products allow customers to trade on the direction of interest rates.

8. CME Group Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

CME Group Inc. operates in a highly regulated industry, and the threat of substitutes is moderate. While there are some alternative exchanges and trading platforms, CME's strong brand and established customer base mitigate the threat of substitutes.

Bargaining Power Of Customers

CME Group Inc. has a diverse customer base, including institutional investors, hedge funds, and individual traders. While customers have some bargaining power, CME's strong brand and market position limit their ability to negotiate prices.

Bargaining Power Of Suppliers

CME Group Inc. has a strong market position and is not heavily dependent on a single supplier. The company's suppliers have limited bargaining power, and CME is able to negotiate favorable terms.

Threat Of New Entrants

The threat of new entrants in the exchange industry is low due to high barriers to entry, including regulatory hurdles and significant capital requirements. CME Group Inc. has a strong market position and is well-positioned to defend its market share.

Intensity Of Rivalry

The exchange industry is highly competitive, with several established players competing for market share. CME Group Inc. faces intense rivalry from other exchanges, including the Intercontinental Exchange (ICE) and the NASDAQ OMX Group.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 11.52%
Debt Cost 5.28%
Equity Weight 88.48%
Equity Cost 6.39%
WACC 6.26%
Leverage 13.02%

11. Quality Control: CME Group Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CME Group

A-Score: 7.1/10

Value: 2.0

Growth: 5.9

Quality: 8.5

Yield: 8.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
Truist

A-Score: 5.8/10

Value: 4.8

Growth: 2.8

Quality: 5.5

Yield: 8.0

Momentum: 6.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Nasdaq

A-Score: 5.7/10

Value: 2.2

Growth: 5.8

Quality: 6.7

Yield: 3.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

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Stock-Card
ICE

A-Score: 5.4/10

Value: 2.7

Growth: 6.1

Quality: 6.7

Yield: 2.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
MSCI

A-Score: 5.3/10

Value: 2.8

Growth: 7.9

Quality: 7.6

Yield: 2.0

Momentum: 4.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
S&P Global

A-Score: 5.1/10

Value: 1.5

Growth: 6.7

Quality: 8.0

Yield: 1.0

Momentum: 4.0

Volatility: 9.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

271.53$

Current Price

271.53$

Potential

-0.00%

Expected Cash-Flows