Key Takeaways
- CBOE leads on valuation, price gains, growth estimates and analyst sentiment.
- Recurring revenues and global diversification support CBOE’s long-term growth.
- Nasdaq benefits from non-trading growth, technology expansion and strategic acquisitions.
Rising market volatility, pro-growth U.S. policies under President Donald Trump, wider digital-asset adoption, exchanges’ continued diversification beyond traditional trading and increasing retail investor participation are set to shape the industry’s outlook. Against this backdrop, let’s assess which company offers stronger long-term growth prospects — Cboe Global Markets (CBOE – Free Report) or Nasdaq (NDAQ – Free Report) .
Cboe Global Markets holds a dominant position in the U.S. listed options market through its ownership of multiple options exchanges, consistently maintaining the industry’s leading market share.
On the other hand, Nasdaq is a leading provider of trading, clearing, marketplace technology, regulatory, securities listing, information and public and private company services.
The Case for CBOE
Cboe Global has developed a well-diversified business through acquisitions and international expansion. Its operations span European equities and derivatives, foreign exchange venues and clearing infrastructure, reducing dependence on any single asset class or geography. Recurring revenues from proprietary market data, index licensing and technology solutions provide stability during periods of softer trading activity, supported by attractive margins and high customer switching costs.
Strong volumes across index options, European equities and foreign exchange continue to support transaction-fee growth, while the Data Vantage segment is expanding recurring revenues. Reflecting this momentum, management raised its 2026 organic net revenue growth outlook to the low-double-digit to mid-teens range and increased its Data Vantage growth target to the low double digits.
Strategic acquisitions and investments are further expanding CBOE’s global reach, product offerings and capital markets infrastructure. The company is also pursuing opportunities in digital assets, carbon markets and next-generation trading technologies while launching innovative derivatives products to address evolving customer needs.
Meanwhile, management is streamlining the portfolio and improving efficiency. The planned divestitures of its Canada and Australia exchanges are expected to lower adjusted operating expenses in 2026.
Cboe Global’s disciplined capital allocation, strong balance sheet and robust free cash flow support growth investments and shareholder returns. The company has raised its dividend for 15 consecutive years and retains $569.4 million under its share-repurchase authorization, highlighting its commitment to returning capital to shareholders.
The Case for NDAQ
Nasdaq operates a diversified business model extending well beyond its traditional exchange operations. Its Market Services segment, covering equities, options and derivatives, benefits from higher trading volumes and market volatility. Meanwhile, Market Technology is expanding annual recurring revenues through subscription-based products and long-term contracts. Cross-selling complementary solutions and integrating acquisitions are also strengthening customer retention and improving revenue visibility.
Organic growth is supported by Nasdaq’s expanding non-trading businesses, including Trading Services and Marketplace Technology, Data and Listing Services, Index, Workflow & Insights and Anti-Financial Crime solutions. These recurring revenue streams have increased the stability and resilience of its overall business mix.
Targeted acquisitions have strengthened Nasdaq’s competitive position by facilitating entry into Canadian equities, broadening its technology capabilities and enhancing market-surveillance offerings. The company is also using advanced technologies and artificial intelligence to modernize market infrastructure and develop innovative solutions for clients.
Nasdaq’s solid balance sheet and steady operating cash flows provide flexibility for shareholder returns and growth investments. Management plans to raise the dividend payout ratio to 35%-38% by 2027 and resume share repurchases to offset dilution related to the Adenza acquisition. Its capital-allocation priorities remain focused on reducing leverage, funding organic growth, pursuing strategic acquisitions, increasing dividends and executing buybacks.
Estimates for CBOE and NDAQ
The Zacks Consensus Estimate for CBOE’s 2026 and 2027 revenues implies a 15% and 2.9% year-over-year increase, respectively. EPS estimates for 2026 and 2027 imply a 27.1% and 5.5% year-over-year increase, respectively. EPS estimates for 2026 and 2027 have moved up 1.5% and 1.6%, respectively, in the past 30 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NDAQ’s 2026 and 2027 revenues implies a 10.1% and 7.7% year-over-year increase, respectively. EPS estimates for 2026 and 2027 indicate a 12.6% and 13.4% year-over-year increase, respectively. EPS estimates for 2026 and 2027 have moved up 1% and 2.1%, respectively, in the past 30 days.
Image Source: Zacks Investment Research
Price Performance of CBOE and NDAQ
CBOE shares have gained 10.7% year to date, while NDAQ shares have lost 3% in the same time.
Image Source: Zacks Investment Research
Are CBOE and NDAQ Shares Expensive?
CBOE is trading at a forward 12-month price-to-earnings multiple of 20.1, lower than its median of 27.1 over the past five years. NDAQ’s forward 12-month price-to-earnings multiple sits at 22.71, slightly higher than its median of 22.19 over the past five years.
Image Source: Zacks Investment Research
Conclusion
A diversified business mix with recurring revenues, accelerated growth banking on recurring non-transaction revenues, use of technology and prudent buyouts poise CBOE well for growth.
Nasdaq is set to grow on impressive organic growth, an increasing on-trading revenue base and strategic buyouts to capitalize on market opportunities. Nasdaq’s focus on Market Technology and Information Services businesses helps explore vast opportunities through its developmental strategies.
Price appreciation, valuation, growth estimate and analyst sentiment give CBOE an edge over NDAQ. CBOE carries a Zacks Rank #2 (Buy) and has a VGM Score of A. NDAQ carries a Zacks Rank #3 (Hold) and has a VGM Score of C. Thus, CBOE is better placed than NDAQ. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
