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HYPOTHETICAL PERFORMANCE RESULTS: The "timing scores" and "regime signals" displayed are based on quantitative models. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity.
RISK OF LOSS: Trading in financial markets involves a high degree of risk and may result in the loss of your entire investment. Data provided by third-party sources (Intrinio, Snowflake) is believed to be reliable but is not guaranteed for accuracy or completeness. Past performance is not indicative of future results.
Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 64GRADE B
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
13.2%
Sector: 8.5%
Dividend Analysis audit
INCOME
3.96%
Trailing Yield
$3.96
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
114%HIGH
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, CME GROUP INC. (CME) receives a "Hold" rating with a composite score of 57.1/100, ranked #275 out of 4446 stocks. Key factor scores: Quality 64/100, Value 56/100, Momentum 56/100. This is quantitative analysis only — not investment advice.
CME GROUP INC. (CME) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does CME GROUP INC. Do?
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. CME GROUP INC. (CME) is classified as a large-cap stock in the Financials sector, specifically within the Trading industry. The company is led by CEO Terrence A. Duffy and employs approximately 3,460 people, headquartered in Chicago, Illinois. With a market capitalization of $107.7B, CME is one of the prominent companies in the Financials sector.
CME GROUP INC. (CME) Stock Rating — Hold (April 2026)
As of April 2026, CME GROUP INC. receives a Hold rating with a composite score of 57.1/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.CME ranks #275 out of 4,446 stocks in our coverage universe. Within the Financials sector, CME GROUP INC. ranks #102 of 891 stocks, placing it in the top quartile of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
CME Stock Price and 52-Week Range
CME GROUP INC. (CME) currently trades at $295.30. The stock lost $3.63 (1.2%) in the most recent trading session. The 52-week high for CME is $329.16, which means the stock is currently trading -10.3% from its annual peak. The 52-week low is $248.53, putting the stock 18.8% above its annual trough. Recent trading volume was 3.0M shares, reflecting moderate market activity.
Is CME Overvalued or Undervalued? — Valuation Analysis
CME GROUP INC. (CME) carries a value factor score of 56/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 28.90x, compared to the Financials sector average of 14.88x — a premium of 94%. The price-to-book ratio stands at 3.82x, versus the sector average of 1.22x. The price-to-sales ratio is 17.02x, compared to 0.90x for the average Financials stock. On an enterprise value basis, CME trades at 25.95x EV/EBITDA, versus 3.26x for the sector.
Overall, CME's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
CME GROUP INC. Profitability — ROE, Margins, and Quality Score
CME GROUP INC. (CME) earns a quality factor score of 64/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 13.2%, compared to the Financials sector average of 8.5%, which is within a healthy range. Return on assets (ROA) comes in at 1.9% versus the sector average of 1.2%.
On a margin basis, CME GROUP INC. reports gross margins of 84.5%. The operating margin is 65.5% (sector: 21.8%). Net profit margin stands at 58.9%, versus 17.7% for the average Financials stock. Revenue growth is running at 0.3% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
CME Debt, Balance Sheet, and Financial Health
CME GROUP INC. has a debt-to-equity ratio of 591.0%, compared to the Financials sector average of 121.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 1.03x, suggesting adequate working capital coverage. Cash and equivalents stand at $2.45B.
CME has a beta of 0.14, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for CME GROUP INC. is 95/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
CME GROUP INC. Revenue and Earnings History — Quarterly Trend
In TTM 2026, CME GROUP INC. reported revenue of $6.46B and earnings per share (EPS) of $11.18. Net income for the quarter was $3.80B. Operating income came in at $4.23B.
In FY 2025, CME GROUP INC. reported revenue of $6.52B and earnings per share (EPS) of $11.18. Net income for the quarter was $4.07B. Revenue grew 6.4% year-over-year compared to FY 2024. Operating income came in at $4.23B.
In Q3 2025, CME GROUP INC. reported revenue of $1.54B and earnings per share (EPS) of $2.49. Net income for the quarter was $908M. Revenue grew -3.0% year-over-year compared to Q3 2024. Operating income came in at $973M.
In Q2 2025, CME GROUP INC. reported revenue of $1.69B and earnings per share (EPS) of $2.81. Net income for the quarter was $1.03B. Revenue grew 10.4% year-over-year compared to Q2 2024. Operating income came in at $1.13B.
Over the past 8 quarters, CME GROUP INC. has demonstrated a growth trajectory, with revenue expanding from $1.53B to $6.46B. Investors analyzing CME stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
CME Dividend Yield and Income Analysis
CME GROUP INC. (CME) currently pays a dividend yield of 4.0%. At this yield, a $10,000 investment in CME stock would generate approximately $$396.00 in annual dividend income. This compares to the Financials sector average dividend yield of 2.5%, meaning CME offers above-average income for its sector. With a net margin of 58.9%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
CME Momentum and Technical Analysis Profile
CME GROUP INC. (CME) has a momentum factor score of 56/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 33/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 28/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
CME vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing CME against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full CME vs S&P 500 (SPY) comparison to assess how CME GROUP INC. stacks up against the broader market across all factor dimensions.
CME Next Earnings Date
No upcoming earnings date has been announced for CME GROUP INC. (CME) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy CME? — Investment Thesis Summary
CME GROUP INC. presents a balanced picture with arguments on both sides. The quality score of 64/100 indicates above-average profitability and business fundamentals. Low volatility (stability score 95/100) reduces downside risk.
In summary, CME GROUP INC. (CME) earns a Hold rating with a composite score of 57.1/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on CME stock.
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Institutional Research Dossier
CME GROUP INC. (CME) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Buy rating on CME Group (CME), driven by its dominant market position in derivatives trading, exceptional profitability, and the inherent stability of its business model. CME benefits from strong network effects and high barriers to entry, resulting in a wide economic moat. While the valuation appears rich compared to the broader financials sector, the premium is justified by CME's superior margins, consistent cash flow generation, and low volatility.
The primary driver of our positive outlook is CME's ability to generate consistent revenue and earnings growth through increased trading volumes and new product offerings. The company's strong balance sheet and disciplined capital allocation further support our confidence in its long-term prospects. Despite some valuation concerns, we believe CME remains an attractive investment for long-term investors seeking stability and growth in the financial sector.
Business Strategy & Overview
CME Group operates the world's largest and most diverse derivatives marketplace, offering a wide range of futures and options contracts across asset classes including interest rates, equity indexes, foreign exchange, agricultural commodities, energy, and metals. The company's core business model revolves around facilitating trading activity and providing clearing and settlement services. CME generates revenue primarily through transaction fees charged on each contract traded on its exchanges. A key element of CME's strategy is to continually innovate and introduce new products to meet the evolving needs of its diverse customer base, which includes professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, governments, and central banks.
CME's strategic positioning is reinforced by its global reach and its commitment to providing a robust and reliable trading platform. The company invests heavily in technology to ensure the efficiency, security, and accessibility of its markets. Furthermore, CME actively engages with regulators and policymakers to maintain a compliant and transparent trading environment. The company's clearing house services are critical to its operations, providing risk management and ensuring the financial integrity of the markets. This includes clearing, settling, and guaranteeing futures and options contracts, and cleared swaps products traded through its exchanges.
CME's product pipeline is focused on expanding its offerings in high-growth areas such as environmental, social, and governance (ESG) derivatives, cryptocurrency derivatives, and other innovative financial instruments. The company also seeks to expand its geographic footprint by establishing partnerships and acquiring strategic assets in key markets around the world. The company's market data services provide real-time and historical data, which are essential for traders and investors, and contribute to the company's revenue stream. CME's ability to adapt to changing market conditions and regulatory requirements is crucial to its long-term success.
The industry context in which CME operates is characterized by increasing globalization, technological advancements, and regulatory scrutiny. Competition comes from other exchanges, over-the-counter (OTC) markets, and alternative trading platforms. However, CME's scale, liquidity, and established reputation provide a significant competitive advantage. The company's ability to attract and retain a diverse range of market participants is essential to maintaining its leading position in the derivatives market. CME's focus on innovation, risk management, and regulatory compliance positions it well for continued growth and profitability in the years ahead.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
0.3%
Sector: 9.4%
-96% VS SCTR
Economic Moat Analysis
CME Group possesses a wide economic moat, primarily derived from its strong network effects and high barriers to entry. The network effect is evident in the fact that the more participants trade on CME's exchanges, the more valuable the platform becomes for all users. Increased liquidity attracts more traders, leading to tighter bid-ask spreads and lower transaction costs, further enhancing the platform's appeal. This creates a virtuous cycle that is difficult for competitors to replicate.
High barriers to entry also contribute significantly to CME's moat. Establishing a new derivatives exchange requires substantial capital investment, regulatory approvals, and the ability to attract a critical mass of market participants. CME's established infrastructure, clearing house capabilities, and long-standing relationships with regulators provide a significant advantage over potential new entrants. Furthermore, the company's brand reputation and track record of reliability enhance its credibility and attract more customers.
The switching costs for CME's customers are also relatively high. Traders and financial institutions have invested significant resources in integrating their systems with CME's platform. Switching to a new exchange would require costly system upgrades, retraining of personnel, and the risk of disrupting existing trading strategies. This creates a degree of customer stickiness that protects CME's market share.
While CME does not possess significant intangible assets in the traditional sense, its regulatory licenses and approvals can be considered a form of intangible asset that provides a competitive advantage. The company's expertise in risk management and regulatory compliance is also a valuable asset that is difficult for competitors to replicate. CME's efficient scale allows it to operate at a lower cost per transaction than smaller competitors, further enhancing its profitability. The combination of network effects, high barriers to entry, switching costs, and efficient scale creates a formidable economic moat that protects CME's market position and allows it to generate consistently high returns on capital.
Financial Health & Profitability
CME Group exhibits strong financial health, characterized by high profitability, consistent revenue growth, and a solid balance sheet. The company's gross margin of 84.6% and operating margin of 65.5% significantly exceed the sector averages of 0.0% and 22.0%, respectively, highlighting its efficient business model and pricing power. The net margin of 58.9% further underscores CME's exceptional profitability. While revenue growth of 0.3% is lower than the sector average of 9.3%, it is important to note that CME operates in a more mature and stable market, where consistent growth is more indicative of its strength than rapid expansion.
CME's return on equity (ROE) of 13.2% is also higher than the sector average of 8.5%, demonstrating its ability to generate attractive returns for shareholders. The company's balance sheet is relatively strong, with total cash of $2.45 billion and a current ratio of 1.03, indicating sufficient liquidity to meet its short-term obligations. While the debt-to-equity ratio of 591.00 is significantly higher than the sector average of 115.00, it is important to consider that CME's business model generates consistent cash flow, which mitigates the risk associated with its debt levels. The company's stability score of 95/100 reflects its low volatility and resilience to economic downturns.
Analyzing the quarterly financial history reveals a consistent trend of revenue and net income growth. Revenue has increased from $5.58 billion in FY2023 to $6.52 billion in FY2025, while net income has increased from $3.23 billion to $4.07 billion over the same period. Operating margins have remained consistently high, ranging from 61.3% to 67.5% across the quarters. This consistent performance demonstrates the stability and predictability of CME's business model.
The absence of free cash flow data in the provided information is a limitation, but the strong net income and EBITDA figures suggest that CME generates significant cash flow from its operations. Overall, CME's financial health is robust, supported by high profitability, consistent revenue growth, and a solid balance sheet. The company's ability to generate consistent cash flow and maintain high margins positions it well for continued success in the years ahead.
Valuation Assessment
CME Group's valuation presents a mixed picture. The company's P/E ratio of 27.5x is significantly higher than the sector average of 15.5x, suggesting that the stock is relatively expensive compared to its peers. Similarly, the EV/EBITDA ratio of 6.4x is higher than the sector average of 3.5x, further indicating a premium valuation. However, it's crucial to consider CME's superior profitability, stability, and growth prospects when assessing its valuation.
The premium valuation is justified by CME's wide economic moat, consistent cash flow generation, and low volatility. The company's dominant market position and high barriers to entry allow it to command higher margins and generate more predictable earnings than its competitors. Furthermore, CME's stability score of 95/100 reflects its resilience to economic downturns, making it a more attractive investment during periods of uncertainty.
While a free cash flow yield would provide a more comprehensive valuation assessment, the strong net income and EBITDA figures suggest that CME generates significant cash flow from its operations. The company's ability to consistently increase revenue and earnings also supports its premium valuation. Investors are willing to pay a higher multiple for CME's earnings due to its superior quality and growth potential.
Compared to its historical valuation, CME's current P/E ratio is within its historical range, although at the higher end. This suggests that the stock is not significantly overvalued relative to its past performance. However, it is important to monitor the company's growth rate and profitability to ensure that its valuation remains justified. Overall, while CME's valuation appears rich compared to the broader financials sector, the premium is warranted by its superior fundamentals and growth prospects. We believe that the stock is fairly valued at its current price, considering its long-term potential.
Risk & Uncertainty
Several risks and uncertainties could impact CME Group's future performance. Regulatory changes pose a significant threat, as new regulations could increase compliance costs, limit trading activity, or alter the competitive landscape. For example, increased margin requirements or restrictions on certain types of derivatives could reduce trading volumes and negatively impact CME's revenue. The company must continually adapt to evolving regulatory requirements to maintain its competitive position.
Competition from other exchanges and alternative trading platforms is another key risk. While CME benefits from its dominant market position, new entrants and existing competitors are constantly seeking to gain market share. The rise of electronic trading and the increasing availability of data have lowered the barriers to entry for new exchanges. CME must continue to innovate and invest in its technology to maintain its competitive edge.
Economic downturns and market volatility can also impact CME's trading volumes and revenue. During periods of economic uncertainty, trading activity may decline as investors become more risk-averse. Conversely, periods of high volatility can lead to increased trading volumes, but also increased risk. CME must effectively manage its risk exposure and maintain a stable trading environment during periods of market turbulence.
A potential concentration risk exists within CME's product offerings. A significant portion of the company's revenue is derived from a few key asset classes, such as interest rate derivatives and equity index futures. A decline in trading activity in these asset classes could have a material impact on CME's financial performance. The company must diversify its product offerings and expand into new markets to mitigate this risk.
Bulls Say / Bears Say
The Bull Case
BULL VIEWCME's dominant market share and network effects create a powerful competitive advantage, ensuring consistent revenue and earnings growth.
BULL VIEWThe company's commitment to innovation and new product development will drive future growth and expand its addressable market.
The Bear Case
BEAR VIEWCME's high valuation leaves little room for error, and any slowdown in trading activity could lead to significant downside risk.
BEAR VIEWIncreased regulatory scrutiny and competition from alternative trading platforms could erode CME's market share and profitability.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score CME and 4,400+ other equities.
CME GROUP INC. exhibits a 699% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
1.9%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
84.5%
Sector: 0.0%
Operating Margin
Core business profitability
65.5%
Sector: 21.8%
Net Margin
Bottom-line profitability
58.9%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.48%
Yield Delta+60%
Income Projection audit
A $10,000 investment would generate approximately $396 annually in dividends at the current trailing rate.
