CME Group Inc. (CME) Intrinsic Value & DCF Valuation
Financial - Data & Stock Exchanges · NASDAQ
Current Price
$294.04
Intrinsic Value
$346.73
+15.2% margin of safety
What Is CME Group Inc.'s Intrinsic Value?
As of 2026-10-28, the base-case DCF model estimates the intrinsic value of CME Group Inc. (CME) at $346.73 per share, compared with a market price of $294.04, a margin of safety of +15.2%. The base case assumes 9.5% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $286.05 to $415.94. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is CME Group Inc. (CME) Undervalued?
At $294.04, CME trades about 15.2% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Dominant Exchange Network Effects
CME's extensive trading platforms create powerful network effects. More participants attract more liquidity, which in turn attracts even more participants, creating a self-reinforcing cycle.
↑High Switching Costs for Users
Traders and institutions are deeply integrated into CME's systems and workflows. Migrating to a competitor would involve significant costs, time, and operational disruption.
↑Data and Scale Advantage
CME's vast historical data and operational scale provide a significant advantage. This allows for sophisticated analytics, efficient execution, and a deep understanding of market dynamics.
INVESTMENT RISKS
↓Competition from New Asset Classes
The increasing popularity of digital assets and the development of new trading platforms for these assets present a competitive threat to traditional futures and options markets.
↓Macroeconomic Sensitivity
CME's trading volumes are sensitive to broader economic conditions, interest rate changes, and inflation. Significant downturns or volatility can negatively impact revenue.
↓Technological Disruption
While CME benefits from technology, rapid advancements in AI and blockchain could lead to new trading paradigms or more efficient competitors that challenge its established infrastructure.
Base case
CME base case valuation
Intrinsic Value
$346.73
Margin of safety
+15.2%
Expected annual return
+3.4%
Base case assumptions: 9.5% annual growth, 10.0% discount rate, 24.4x exit multiple, 5 year projection. Data as of 2026-10-28.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the CME valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for CME Group Inc. respond.
Open DCF Calculator for CMECompany Overview
CME Group Inc., through its various subsidiaries, manages international marketplaces for the exchange of futures and options on futures contracts worldwide. Its extensive array of product offerings includes futures and options linked to a broad spectrum of underlying assets, such as interest rates, equity indices, foreign exchange, agricultural commodities, energy, and metals, alongside fixed-income products. The company additionally furnishes essential clearinghouse services, which entail the verification, settlement, and guarantee of futures, options, and cleared swap agreements traded across its venues. It also offers services for transaction processing and risk mitigation. Furthermore, the organization provides diverse market data services, encompassing both real-time and historical data feeds. Its wide-ranging client base consists of professional traders, financial institutions, both institutional and individual investors, corporations, manufacturers, producers, governments, and central banks. Founded in Chicago, Illinois, in 1898, the enterprise was formerly known as Chicago Mercantile Exchange Holdings Inc. before rebranding as CME Group Inc. in July 2007.
Financial Metrics — CME Stock Valuation Data
Revenue/Share (TTM)
$19.47
FCF/Share (TTM)
$12.10
ROIC (TTM)
9.7%
ROE (TTM)
16.2%
P/FCF
24.4x
EV/EBITDA
16.1x
FCF Yield
4.10%
Debt/Equity
0.13x
On a trailing twelve-month basis, CME generates free cash flow per share of $12.10 alongside a ROIC of 9.7%, both central inputs for a DCF valuation. Its P/FCF ratio of 24.4x and FCF yield of 4.10% then frame how CME is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of CME?
CME Group Inc. currently generates $12.10 in free cash flow per share. At the current price of $294.04, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is CME undervalued?
CME trades at a P/FCF ratio of 24.4x with a free cash flow yield of 4.10%. This P/FCF is in a moderate range. However, whether CME is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value CME stock using DCF?
To perform a DCF valuation on CME Group Inc.: (1) Start with the trailing free cash flow per share ($12.10) as the base, (2) project future FCF growth over 5-10 years based on Financial - Data & Stock Exchanges industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting CME's risk profile — with a debt-to-equity of 0.13x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to CME?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For CME Group Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Financial - Data & Stock Exchanges trends, then discounting those amounts to today's dollars. CME's ROIC of 9.7% shows moderate capital returns.
How does WACC affect CME stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For CME, with a debt-to-equity ratio of 0.13x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 16.1x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See CME PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Financial Services valuationsDCF and P/E value CME with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-10-28. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.