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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Cme Group Inc. (XNAS:CME) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CME
Name:
CME GROUP INC. (XNAS:CME)
Sector:
775.70M
Industry:
Financial Data & Stock Exchanges
CEO:
Hon. Terrence Duffy
Total Employees:
3,480
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -85.37% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CME GROUP INC.(CME) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND FINANCIAL DATA & STOCK EXCHANGES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
194.69
One Month Price Target:
$195.13
Six Month Price Target :
$197.32
Likely Price in One Year's Time:
Ticker:
$199.96
Likely Trading Range Today Under (Normal Volatility)
$194.01
Price Upper limit ($) :
$195.44
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$186.1
This week:
$175.47
This month :
$156.26
Other Primary facts
Market Cap:
71.18B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
359.43M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.84%
-18.39%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$234.58
$216.38
$154.80
$173.00
Medium risk (<10%) entry points
Buy Call
Sell Call
$210.45
Buy Put:
Sell Put:
$206.57
$178.88
$182.81
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CME
Sharpe Ratio:
0.35%
Comparison:
CME, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -87.10% lower than the industry
& is -84.70% lower than the market/S&P 500 average
Average Returns/Yield of
CME
Daily returns:
0.02%
Weekly returns:
0.08%
Monthly returns:
0.33%
Yearly returns:
18.99%
Comparison of returns:
Average annual returns/yield (last 3 years) is -79.31% below industry average
Classification:
CME, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.82
Statistical test of Returns:
CME has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.16%
Weekly Volatility:
4.82%
Monthly Volatility:
9.65%
Yearly Volatility:
33.42%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.78%
Volatility in last five trading days has been -17.72% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.41%
Weekly VaR:
-9.87%
Monthly VaR:
-19.74%
How Much Can the price of
CME
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-68.38%
This translates to price declining to:
$161.06
This translates to price declining to:
$61.55
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
CME is a 39.33% riskier investment compared to the market/S&P 500 & is 19.36% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -7.38% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CME
Beta in relation to market/S&P 500--0.40
Expected beta in 1 year's time:
0.519
Expected beta in 3 year's time:
0.734
Unlevered (debt free) Beta:
0.367
Beta in relation to Nasdaq (XNAS):
0.617
Beta in relation to all global stocks::
0.76
Beta Comparison & Analysis
Beta of competitors/peers::
1.122
Beta is -64.12% lower than peers
Average Industry Beta:
0.802
Beta is -49.81% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
1.13%
Sustainable growth rate is -96.80% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.020
Alpha is -119.12% below industry average alpha yield
Alpha is -126% below the market average
Analysis of Cost of Capital of
CME
Equity cost of capital:
0.059
Equity cost of capital is -31.65% below industry mean WACC
Unlevered (without debt) cost of capital:
5.38%
Before-tax cost of debt:
4.88%
After-tax cost of debt:
3.86%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.86%
WACC is -13.87% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$13.31
Revenue growth rate per share of (3Y):
2.52
Annual revenue growth rate is -88.22% below industry average
EPS:
$7.64
Expected Annual growth rate of EPS (3Y):
7.13%
Expected future EPS growth rate is -54.40% lower than the Financial Data & Stock Exchanges industry
Free cash flow (FCF) per share:
$6.92
Balance sheet equity growth per share: -2.72%
Equity growth rate per share is -109.39% lower than the industry
Debt per share
$9.56
EBITDA per share
$11.36
Valuation Analysis Today of
CME
P/E Ratio:
24.22
P/E Ratio of Competitors/Peers:
15.09
P/E ratio is 60.45% higher than main peers & is -22.15% lower than the industry
Stock price/value with industry average P/E ratio: $237.64
CME is -18.07% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
14.63
Price to sales ratio is 47.50% above the industry mean
P/B (Price to book value ratio):
2.52
Price to free cash flow: 28.13
Price to free cash flow ratio is 2.00% higher than the industry
Net income growth rate (3Y):
28.35%
Net income growth rate is -55.66% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 55.66%
Dividend yeild: 2.70%
Previous Dividend: $1.00
Previous adjusted dividend: $1.00
Previous Dividend: $5.25
Expected next dividend best case: $1.76
Expected next dividend worst case: $0.24
Average dividend payment (long-term): $1.30
Average dividend increase/decrease (growth rate) % per period: 449886.34%
Expected next dividend payment date: 26/09/2022
Expected next dividend record date: 09/08/2022
-
Previous dividend payment date: 27/06/2022
Previous dividend record date: 06/10/2022
-
Dividend History:
2022-06-09--$1.00
2021-12-27--$3.25
2021-09-09--$0.90
2022-03-09--$1.00
2021-12-09--$0.90
2021-06-09--$0.90
Dividend growth rate is 4980321.07% higher than the average industry
In-depth Debt & Leverage Analysis
Debt to equity ratio:
12.39%
Net debt to equity ratio:
5.02%
Debt to assets ratio:
1.67%
Net debt to assets ratio:
0.68%
Debt-to-asset ratio is -96.97% below industry average
Ability to repay debt:
Interest coverage ratio:
24.33
Interest coverage ratio is -19.00% less than industry average
Looking forward:
Debt growth rate:
0.04%
Annual debt growth is -100% lower than industry average debt growth rate
Debt repayment rate in last quarter: 18.03%
Analysis of Key Statistics
Correlation of price movement with the market:
0.635
Statistical significance of correlation:
CME has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.632
Stock price is 0.41% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.632
Correlation of price movement with Nasdaq (^IXIC):
0.038
Covariance of price movement with the market:
0.048
Kurtosis
15.558
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-1.017
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
CME
Gross Profit Margin Ratio:
333%
Operating Profit Margin Ratio:
58.11%
Operating profit margin is 66.67% higher than the industry
Net Profit Margin Ratio:
333%
Effective Tax Rate:
21.61%
Effective tax rate is -3.26% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
10.00%
Return on equity (ROE) is -80.36% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
1.35%
Return on assets (ROA) is -88.08% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
1.02
Current ratio is -39.98% below industry average
Cash Conversion Cycle (days):
3.4
Cash conversion cycle is -86.33% below industry average
The remaining useful life of property plant & equipment is: 4.8 years
Stock based compensation to net income ratio:
0.72%
In-depth Efficiency Analysis
Revenue generated per employee:
1.4M
Each employee generates 62% more revenue than industry average revenue per employee
EBITDA generated per employee:
1.2M
Each employee generates 171% more EBITDA than industry average revenue per employee
Profit generated per employee:
796.8K
Each employee generates 199% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
222.9K
Each employee generates 31% more free cash flow than industry average revenue per employee
Assets/Capital per employee
10.0M
Each employee generates 31% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CME
BRIGHT LIGHTS ACQUISITION UNT (XNAS:BLTSU)
Lucid Group, Inc (XNAS:LCID)
GRNVU
SVB FINANCIAL GROUP (XNAS:SIVB)
FIFTH THIRD BANCORP (XNAS:FITB)
Nasdaq, Inc. (XNAS:NDAQ)
INTERACTIVE BROKERS GROUP, INC. (XNAS:IBKR)
Willis Towers Watson Public Limited Company (XNAS:WTW)
HBANN
Current Analyst Ratings
Strong buy�17%
Buy�21%
Hold�21%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
4.78B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
797.20M
3.99B
-
589.50M
589.50M
-
617.10M
1.21B
-
167.90M
379.10M
4.08B
2.78B
2.77B
3.54B
764.50M
2.77B
Statement of Cash Flow
Date:
Period:
91.90M
Differed Income Tax :
- 5100.00K
Stock Based Compensation :
20.00M
Change in Working Capital :
- 35200.00K
Accounts Receivables:
- 174000.00K
Other Working Capital:
-
Other Non-Cash Items:
16.50M
Net Cash Provided by Operating Activities:
799.10M
Investments in PP&E:
- 23400.00K
Net Acquisitions:
-
Purchases of Investments:
- 2200.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
2.05B
109.60M
2.16B
608.90M
-
168.24B
171.00B
493.90M
10.52B
20.64B
-
-
3.27B
34.91B
-
205.92B
80.80M
-
-
-
168.38B
168.46B
3.44B
903.50M
9.72B
-
178.18B
3.60M
5.50B
28.0M
22.21B
March 31, 2022 at 6:00:00 AM
2.00B
27.74B
205.92B
-
3.44B
1.4B
2.70M
-
- 22900.00K
- 756100.00K
-
-
- 1543500.00K
10.52B
8.22B
-
9.00B
169.79B
160.79B
799.10M
- 23400.00K
775.70M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
CME
2023
2024
2025
2026
2027
$205.41
$210.96
$216.67
$222.53
$228.55