CME Group (CME) Valuation Check After New Crypto Futures And Record Natural Gas Activity

CME Group (CME) is in focus after announcing new cryptocurrency futures tied to Cardano, Chainlink, and Stellar, along with fresh crypto indices and record activity in its natural gas complex.

See our latest analysis for CME Group.

These crypto launches and record natural gas volumes come after a steady run in CME Group’s shares. The latest share price is $282.74, with a 1-year total shareholder return of 22.77% and a 5-year total shareholder return of 88.05%.

If this kind of derivatives driven growth story interests you, it could be worth checking out fast growing stocks with high insider ownership as you look for other potential opportunities beyond CME Group.

With CME Group shares returning 22.77% over the past year and trading only about 3% below the average analyst price target, the key question now is whether there is still a buying opportunity here or if the market is already pricing in future growth.

Most Popular Narrative: 1.9% Undervalued

The most followed narrative puts CME Group’s fair value at about $288 per share, slightly above the last close of $282.74. This keeps the focus on what is built into those expectations.

The ongoing global shift toward electronic trading, greater regulatory demands for transparency and standardized clearing, and a proven ability to grow non-transactional revenue (e.g., record market data revenue) position CME to capture a larger share of trading activity and support durable long-term earnings growth.

Read the complete narrative.

Curious what underpins that fair value edge over the current price? The narrative leans heavily on measured revenue growth, high margins, and a premium future earnings multiple. Want to see how those threads come together in the model?

Result: Fair Value of $288 (UNDERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, this hinges on sustained trading activity, and a meaningful shift toward DeFi or other low fee venues could pressure CME Group’s volumes and transaction driven revenue model.

Find out about the key risks to this CME Group narrative.

Another Angle: Cash Flows Paint A Tougher Picture

While the popular narrative sees CME Group as about 1.9% undervalued at a fair value of roughly $288 per share, the Simply Wall St DCF model comes out very differently. On that view, the current price of $282.74 sits well above an estimated cash flow value of $202.51, which points to the shares as expensive rather than cheap. So which story do you think reflects reality: sentiment driven pricing, or cash flow discipline?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out CME Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 864 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

Build Your Own CME Group Narrative

If you see the numbers differently or prefer testing your own assumptions against the data, you can build a custom view in minutes. Do it your way.

A great starting point for your CME Group research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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