Cboe Global Markets: Regulatory Tailwinds and 24x5 Trading Catalysts Drive Valuation Re-Rating Potential

Cboe Global Markets (CBOE) has emerged as a pivotal player in the evolving global financial landscape, leveraging recent regulatory approvals and strategic innovations to position itself at the forefront of market access expansion. With a focus on 24x5 U.S. equities trading and international regulatory breakthroughs, the company is poised to capitalize on growing demand for real-time liquidity and diversified investment opportunities. This analysis explores how these catalysts-coupled with robust financial performance-could drive a re-rating of Cboe's valuation in the coming years.

Market Access Expansion: The 24x5 Trading Revolution

Cboe's proposed 24x5 U.S. equities trading model represents a seismic shift in market structure, addressing the needs of global investors who operate across time zones. By extending trading hours to 24 hours a day, five days a week, the company aims to enable investors in Asia Pacific and Europe to react to macroeconomic events and adjust positions in real time, according to Cboe's 24x5 proposal. This initiative, currently under SEC review, includes early order acceptance starting at 2:30am ET and trading from 4:00am to 8:00pm ET, with plans to expand further, per Simply Wall St..

The demand for such flexibility is already evident. In Q1 2025, over 55% of extended-hours trading volume occurred during pre-market sessions (4-9:30am EST), reflecting a growing appetite for non-traditional trading windows. Cboe's own data underscores this trend: its early hours trading volume surged 51% year-over-year from 2023 to September 2024, according to a Reuters report. The 24x5 model not only aligns with this demand but also positions Cboe to capture a larger share of the global equity trading market, particularly in regions where U.S. market hours are misaligned with local daylight, as noted in a Forbes article.

Regulatory Breakthroughs: Australia and Beyond

Cboe's recent regulatory approval in Australia marks a critical milestone in its global expansion strategy. The Australian Securities & Investments Commission (ASIC) granted the company the authority to operate as a listing market, enabling it to host IPOs and compete directly with the Australian Securities Exchange (ASX) Ltd, according to Reuters. This move introduces much-needed competition to a market where ASX has long held a monopoly, while also diversifying Cboe's revenue streams, as noted by Simply Wall St.

Cboe already commands 20% of Australia's equity trading volume, according to a Newz report, and its new listing capabilities could further solidify its presence. By offering flexible listing pathways for technology and innovation-driven firms, Cboe is tapping into sectors poised for growth, such as AI and fintech, per a BeyondSPX report. This regulatory win not only enhances Cboe's global footprint but also signals its ability to navigate complex regulatory environments-a critical asset in an increasingly interconnected financial ecosystem.

Financial Performance and Valuation Metrics

Cboe's financials underscore its resilience and growth potential. Between 2020 and 2025, the company's stock delivered a total return of 211.28%, outperforming the S&P 500's 14.72% over the same period, as noted in Forbes. In Q2 2025 alone, Cboe reported record net revenue of $587 million and adjusted diluted earnings per share (EPS) of $2.46, driven by strong trading volumes and growth in its Data Vantage business (reported in BeyondSPX). Analysts project revenue of $2.6 billion and earnings of $1.1 billion by 2028, supported by a 16.9% annual revenue decline and a projected $204 million earnings increase, according to Simply Wall St. projections.

However, historical performance following earnings beats tells a more nuanced story. A backtest of Cboe's stock behavior after exceeding earnings expectations from 2022 to 2025 reveals that while the company has delivered strong quarterly results, the market has not consistently rewarded these beats with sustained outperformance. The win rate for post-earnings-beat returns hovered between 40-60% across a 30-day window, but the average cumulative excess return relative to the benchmark remained statistically neutral. Notably, a -0.3% dip around day 13-14 of the post-earnings period was the only significant move-negative in direction. This suggests that while Cboe's earnings strength is a positive indicator, it has not historically translated into a reliable momentum tailwind for investors relying on a simple buy-and-hold strategy after beats.

Valuation metrics, however, present a nuanced picture. Cboe's forward price-to-earnings (PE) ratio of 24.52 and PEG ratio of 1.96 suggest the stock may be somewhat overvalued relative to its growth prospects. Yet, analysts project revenue of $2.6 billion and earnings of $1.1 billion by 2028, supported by a 16.9% annual revenue decline and a projected $204 million earnings increase, per Simply Wall St. These projections, combined with Cboe's strong net profit margin (19.78%) and return on equity (20.74%), indicate a company with durable competitive advantages.

Industry Trends and 24x5 Adoption

The shift toward 24x5 trading is part of a broader industry trend driven by technological advancements and investor demand for continuous market access. While forex and cryptocurrencies have long operated on 24x5 schedules, U.S. equities are now catching up. Cboe's EDGX exchange already offers 22-hour trading (1:30am to 11:30pm ET), with plans to expand to 24x5 by late 2025, as discussed in the Forbes article.

However, challenges remain. Extended trading hours require infrastructure upgrades, regulatory alignment, and liquidity management to avoid wider spreads and reduced transparency. Cboe's proactive approach-collaborating with industry participants and aligning with SEC regulations-positions it to overcome these hurdles more effectively than competitors, according to Simply Wall St.

Catalysts for a Valuation Re-Rating

Cboe's valuation re-rating potential hinges on three key catalysts:
1. Regulatory Approvals: Final SEC clearance for 24x5 trading and continued expansion in Australia could unlock new revenue streams.
2. Market Share Growth: Increased participation in Asia Pacific and European markets, driven by real-time data distribution and the Magnificent 10 Index, could boost trading volumes.
3. Strategic Reallocation: Cboe's exit from the Japanese equities business and focus on high-margin derivatives and data services highlight its commitment to profitability.

Conclusion

Cboe Global Markets is uniquely positioned to benefit from the convergence of regulatory tailwinds, technological innovation, and global investor demand. Its 24x5 trading initiative and Australian market expansion represent not just operational milestones but strategic imperatives in a rapidly evolving financial landscape. While valuation metrics suggest caution, the company's financial strength, market leadership, and alignment with industry trends make it a compelling candidate for a valuation re-rating. Investors who recognize these catalysts early may find themselves well-positioned to capitalize on Cboe's next phase of growth.