CME Group Inc

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CME : NASDAQ : Financial
$102.29 up 0.79 | 0.78%
Today's Range: 101.30 - 102.47
Avg. Daily Volume: 1,414,000
07/27/16 - 2:30 PM ET

Financial Analysis


CME GROUP INC's gross profit margin for the first quarter of its fiscal year 2016 has increased when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. CME GROUP INC has very weak liquidity. Currently, the Quick Ratio is 0.04 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 1.20% 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 Q1 FY16 Q1 FY15
Net Sales ($mil)951.8848.4
EBITDA ($mil)679.0570.7
EBIT ($mil)621.1514.0
Net Income ($mil)367.8330.4


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)1257.21805.6
Total Assets ($mil)68768.277128.4
Total Debt ($mil)2229.82851.9
Equity ($mil)20841.421095.5


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin71.3467.27
EBITDA Margin71.3367.26
Operating Margin65.2660.58
Sales Turnover0.050.04
Return on Assets1.861.54
Return on Equity6.165.64
Debt Q1 FY16 Q1 FY15
Current Ratio1.041.04
Debt/Capital0.10.12
Interest Expense29.831.6
Interest Coverage20.8416.27


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)337.22335.93
Div / share0.60.5
EPS1.090.98
Book value / share61.862.8
Institutional Own % n/a n/a
Avg Daily Volume1463029.01974082.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 8656.47 for the Diversified Financial Services industry and a value on par with the S&P 500 average of 25.05. To use another comparison, its price-to-book ratio of 1.63 indicates a discount versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 835.37. 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 26.66 Peers 8656.47   CME 21.09 Peers 6379.10

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 21.77 Peers 13.24   CME 1.51 Peers 0.33

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 1.63 Peers 835.37   CME 7.06 Peers 36.96

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 9.85 Peers 979.17   CME 7.59 Peers 8.38

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.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

CME is keeping pace with its peers on the basis of sales growth.

 

 

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