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CME Group Inc
CME : NASDAQ : Financial
$82.31 1.11 | 1.37%
Today's Range: 81.02 - 82.42
Avg. Daily Volume: 1,593,100
10/24/14 - 4:00 PM ET

Financial Analysis


CME GROUP INC's gross profit margin for the second quarter of its fiscal year 2014 has decreased when compared to the same period a year ago. Sales and net income have dropped, underperforming the average competitor within its industry. CME GROUP INC has very weak liquidity. Currently, the Quick Ratio is 0.07 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity decreased from the same period a year ago, despite already having very weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.75% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q2 FY14 Q2 FY13
Net Sales ($mil)746.7829.7
EBITDA ($mil)491.4580.5
EBIT ($mil)431.9521.4
Net Income ($mil)263.8311.2


Balance Sheet Q2 FY14 Q2 FY13
Cash & Equiv. ($mil)1147.22069.3
Total Assets ($mil)51611.346882.7
Total Debt ($mil)2107.52857.6
Equity ($mil)21465.421848.6


Profitability Q2 FY14 Q2 FY13
Gross Profit Margin65.8169.97
EBITDA Margin65.869.96
Operating Margin57.8462.84
Sales Turnover0.060.06
Return on Assets1.861.98
Return on Equity4.474.26
Debt Q2 FY14 Q2 FY13
Current Ratio1.071.05
Debt/Capital0.090.12
Interest Expense28.339.2
Interest Coverage15.2613.3


Share Data Q2 FY14 Q2 FY13
Shares outstanding (mil)334.25332.6
Div / share0.470.45
EPS0.790.93
Book value / share64.2265.69
Institutional Own % n/a n/a
Avg Daily Volume1599234.01353670.0

Valuation


BUY. This stock's P/E ratio indicates a significant discount compared to an average of 9667.26 for the Diversified Financial Services industry and a premium compared to the S&P 500 average of 18.06. To use another comparison, its price-to-book ratio of 1.23 indicates a discount versus the S&P 500 average of 2.49 and a significant discount versus the industry average of 871.50. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. Upon assessment of these and other key valuation criteria, CME GROUP INC proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CME 27.57 Peers 9667.26   CME 24.86 Peers 7752.00

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

CME is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CME is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CME 21.24 Peers 11.92   CME 2.68 Peers 0.32

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

CME is trading at a significant premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CME trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CME 1.23 Peers 871.50   CME 2.50 Peers 26.31

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CME is trading at a significant discount to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, CME is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CME 8.96 Peers 1078.96   CME 1.20 Peers 12.70

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CME is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

CME significantly trails its peers on the basis of sales growth

 

 

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