Intrinsic value of CME Group Cl A - CME

Previous Close

$191.56

  Intrinsic Value

$91.14

stock screener

  Rating & Target

str. sell

-52%

Previous close

$191.56

 
Intrinsic value

$91.14

 
Up/down potential

-52%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as CME.

We calculate the intrinsic value of CME stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 65.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  14.60
  13.64
  12.78
  12.00
  11.30
  10.67
  10.10
  9.59
  9.13
  8.72
  8.35
  8.01
  7.71
  7.44
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
Revenue, $m
  4,177
  4,747
  5,353
  5,995
  6,673
  7,384
  8,130
  8,910
  9,724
  10,572
  11,454
  12,372
  13,326
  14,318
  15,348
  16,419
  17,532
  18,689
  19,893
  21,145
  22,450
  23,808
  25,223
  26,699
  28,238
  29,845
  31,522
  33,274
  35,105
  37,019
Variable operating expenses, $m
  1,221
  1,018
  802
  573
  332
  78
  -188
  -466
  -755
  -1,058
  -4,081
  -4,408
  -4,748
  -5,101
  -5,468
  -5,850
  -6,246
  -6,659
  -7,088
  -7,534
  -7,998
  -8,482
  -8,987
  -9,513
  -10,061
  -10,633
  -11,231
  -11,855
  -12,508
  -13,190
Fixed operating expenses, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
Total operating expenses, $m
  1,220
  1,017
  801
  572
  331
  77
  -189
  -467
  -756
  -1,059
  -4,082
  -4,409
  -4,749
  -5,102
  -5,469
  -5,851
  -6,247
  -6,660
  -7,090
  -7,536
  -8,000
  -8,484
  -8,989
  -9,515
  -10,063
  -10,635
  -11,233
  -11,857
  -12,510
  -13,192
Operating income, $m
  2,957
  3,730
  4,552
  5,423
  6,342
  7,308
  8,319
  9,377
  10,481
  11,631
  15,537
  16,782
  18,076
  19,420
  20,818
  22,270
  23,780
  25,349
  26,982
  28,681
  30,450
  32,292
  34,212
  36,213
  38,301
  40,480
  42,755
  45,132
  47,615
  50,211
EBITDA, $m
  6,200
  7,046
  7,946
  8,899
  9,904
  10,961
  12,068
  13,225
  14,433
  15,692
  17,001
  18,363
  19,779
  21,251
  22,780
  24,369
  26,021
  27,739
  29,526
  31,385
  33,320
  35,336
  37,437
  39,627
  41,912
  44,296
  46,786
  49,386
  52,104
  54,944
Interest expense (income), $m
  85
  2,507
  2,581
  2,659
  2,741
  2,829
  2,922
  3,019
  3,121
  3,227
  3,339
  3,454
  3,575
  3,700
  3,831
  3,966
  4,107
  4,253
  4,405
  4,563
  4,728
  4,899
  5,077
  5,263
  5,456
  5,658
  5,868
  6,087
  6,317
  6,556
  6,806
Earnings before tax, $m
  450
  1,149
  1,894
  2,682
  3,513
  4,386
  5,300
  6,256
  7,253
  8,292
  12,082
  13,207
  14,375
  15,590
  16,852
  18,163
  19,526
  20,944
  22,419
  23,953
  25,551
  27,215
  28,949
  30,757
  32,644
  34,612
  36,668
  38,815
  41,059
  43,405
Tax expense, $m
  122
  310
  511
  724
  948
  1,184
  1,431
  1,689
  1,958
  2,239
  3,262
  3,566
  3,881
  4,209
  4,550
  4,904
  5,272
  5,655
  6,053
  6,467
  6,899
  7,348
  7,816
  8,304
  8,814
  9,345
  9,900
  10,480
  11,086
  11,719
Net income, $m
  329
  839
  1,382
  1,958
  2,564
  3,202
  3,869
  4,567
  5,295
  6,053
  8,820
  9,641
  10,494
  11,380
  12,302
  13,259
  14,254
  15,289
  16,366
  17,486
  18,652
  19,867
  21,133
  22,453
  23,830
  25,267
  26,767
  28,335
  29,973
  31,685

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  35,699
  40,569
  45,752
  51,241
  57,031
  63,115
  69,491
  76,156
  83,111
  90,358
  97,901
  105,745
  113,899
  122,374
  131,180
  140,332
  149,845
  159,736
  170,024
  180,730
  191,876
  203,486
  215,584
  228,197
  241,354
  255,085
  269,422
  284,397
  300,046
  316,405
Adjusted assets (=assets-cash), $m
  35,699
  40,569
  45,752
  51,241
  57,031
  63,115
  69,491
  76,156
  83,111
  90,358
  97,901
  105,745
  113,899
  122,374
  131,180
  140,332
  149,845
  159,736
  170,024
  180,730
  191,876
  203,486
  215,584
  228,197
  241,354
  255,085
  269,422
  284,397
  300,046
  316,405
Revenue / Adjusted assets
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
Average production assets, $m
  16,022
  18,208
  20,534
  22,998
  25,596
  28,327
  31,188
  34,180
  37,301
  40,554
  43,939
  47,460
  51,119
  54,923
  58,875
  62,983
  67,252
  71,691
  76,309
  81,114
  86,116
  91,327
  96,757
  102,418
  108,323
  114,485
  120,920
  127,641
  134,664
  142,006
Working capital, $m
  -873
  -992
  -1,119
  -1,253
  -1,395
  -1,543
  -1,699
  -1,862
  -2,032
  -2,210
  -2,394
  -2,586
  -2,785
  -2,992
  -3,208
  -3,432
  -3,664
  -3,906
  -4,158
  -4,419
  -4,692
  -4,976
  -5,272
  -5,580
  -5,902
  -6,238
  -6,588
  -6,954
  -7,337
  -7,737
Total debt, $m
  47,791
  49,233
  50,767
  52,392
  54,105
  55,906
  57,794
  59,767
  61,825
  63,970
  66,203
  68,525
  70,938
  73,447
  76,054
  78,762
  81,578
  84,506
  87,551
  90,720
  94,020
  97,456
  101,037
  104,771
  108,665
  112,730
  116,973
  121,406
  126,038
  130,880
Total liabilities, $m
  10,567
  12,008
  13,543
  15,167
  16,881
  18,682
  20,569
  22,542
  24,601
  26,746
  28,979
  31,301
  33,714
  36,223
  38,829
  41,538
  44,354
  47,282
  50,327
  53,496
  56,795
  60,232
  63,813
  67,546
  71,441
  75,505
  79,749
  84,182
  88,814
  93,656
Total equity, $m
  25,132
  28,560
  32,209
  36,074
  40,150
  44,433
  48,922
  53,614
  58,510
  63,612
  68,922
  74,444
  80,185
  86,151
  92,351
  98,793
  105,491
  112,454
  119,697
  127,234
  135,081
  143,254
  151,771
  160,651
  169,913
  179,580
  189,673
  200,216
  211,232
  222,749
Total liabilities and equity, $m
  35,699
  40,568
  45,752
  51,241
  57,031
  63,115
  69,491
  76,156
  83,111
  90,358
  97,901
  105,745
  113,899
  122,374
  131,180
  140,331
  149,845
  159,736
  170,024
  180,730
  191,876
  203,486
  215,584
  228,197
  241,354
  255,085
  269,422
  284,398
  300,046
  316,405
Debt-to-equity ratio
  1.900
  1.720
  1.580
  1.450
  1.350
  1.260
  1.180
  1.110
  1.060
  1.010
  0.960
  0.920
  0.880
  0.850
  0.820
  0.800
  0.770
  0.750
  0.730
  0.710
  0.700
  0.680
  0.670
  0.650
  0.640
  0.630
  0.620
  0.610
  0.600
  0.590
Adjusted equity ratio
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  329
  839
  1,382
  1,958
  2,564
  3,202
  3,869
  4,567
  5,295
  6,053
  8,820
  9,641
  10,494
  11,380
  12,302
  13,259
  14,254
  15,289
  16,366
  17,486
  18,652
  19,867
  21,133
  22,453
  23,830
  25,267
  26,767
  28,335
  29,973
  31,685
Depreciation, amort., depletion, $m
  3,243
  3,316
  3,394
  3,476
  3,562
  3,653
  3,749
  3,848
  3,952
  4,061
  1,465
  1,582
  1,704
  1,831
  1,963
  2,099
  2,242
  2,390
  2,544
  2,704
  2,871
  3,044
  3,225
  3,414
  3,611
  3,816
  4,031
  4,255
  4,489
  4,734
Funds from operations, $m
  3,572
  4,155
  4,776
  5,433
  6,127
  6,855
  7,618
  8,415
  9,247
  10,114
  10,285
  11,223
  12,198
  13,211
  14,264
  15,359
  16,496
  17,679
  18,909
  20,190
  21,523
  22,911
  24,358
  25,867
  27,441
  29,083
  30,798
  32,590
  34,462
  36,419
Change in working capital, $m
  -111
  -119
  -127
  -134
  -142
  -149
  -156
  -163
  -170
  -177
  -184
  -192
  -199
  -207
  -215
  -224
  -233
  -242
  -252
  -262
  -273
  -284
  -296
  -308
  -322
  -336
  -351
  -366
  -383
  -400
Cash from operations, $m
  3,683
  4,274
  4,903
  5,568
  6,268
  7,004
  7,774
  8,578
  9,417
  10,291
  10,469
  11,415
  12,397
  13,418
  14,480
  15,582
  16,729
  17,921
  19,161
  20,451
  21,795
  23,195
  24,654
  26,175
  27,762
  29,419
  31,149
  32,956
  34,844
  36,819
Maintenance CAPEX, $m
  -466
  -534
  -607
  -684
  -767
  -853
  -944
  -1,040
  -1,139
  -1,243
  -1,352
  -1,465
  -1,582
  -1,704
  -1,831
  -1,963
  -2,099
  -2,242
  -2,390
  -2,544
  -2,704
  -2,871
  -3,044
  -3,225
  -3,414
  -3,611
  -3,816
  -4,031
  -4,255
  -4,489
New CAPEX, $m
  -2,041
  -2,185
  -2,326
  -2,464
  -2,598
  -2,731
  -2,862
  -2,991
  -3,121
  -3,252
  -3,385
  -3,521
  -3,660
  -3,803
  -3,952
  -4,107
  -4,270
  -4,439
  -4,618
  -4,805
  -5,002
  -5,210
  -5,430
  -5,661
  -5,905
  -6,163
  -6,434
  -6,721
  -7,023
  -7,342
Cash from investing activities, $m
  -2,507
  -2,719
  -2,933
  -3,148
  -3,365
  -3,584
  -3,806
  -4,031
  -4,260
  -4,495
  -4,737
  -4,986
  -5,242
  -5,507
  -5,783
  -6,070
  -6,369
  -6,681
  -7,008
  -7,349
  -7,706
  -8,081
  -8,474
  -8,886
  -9,319
  -9,774
  -10,250
  -10,752
  -11,278
  -11,831
Free cash flow, $m
  1,176
  1,554
  1,969
  2,419
  2,903
  3,420
  3,968
  4,547
  5,157
  5,796
  5,732
  6,429
  7,155
  7,911
  8,696
  9,512
  10,360
  11,240
  12,154
  13,103
  14,089
  15,114
  16,180
  17,289
  18,443
  19,645
  20,898
  22,204
  23,566
  24,988
Issuance/(repayment) of debt, $m
  1,373
  1,441
  1,534
  1,625
  1,714
  1,801
  1,887
  1,973
  2,059
  2,145
  2,233
  2,322
  2,414
  2,508
  2,607
  2,709
  2,816
  2,928
  3,045
  3,169
  3,299
  3,436
  3,581
  3,734
  3,895
  4,064
  4,244
  4,433
  4,632
  4,842
Issuance/(repurchase) of shares, $m
  2,898
  2,589
  2,267
  1,907
  1,511
  1,082
  619
  125
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  4,271
  4,030
  3,801
  3,532
  3,225
  2,883
  2,506
  2,098
  2,059
  2,145
  2,233
  2,322
  2,414
  2,508
  2,607
  2,709
  2,816
  2,928
  3,045
  3,169
  3,299
  3,436
  3,581
  3,734
  3,895
  4,064
  4,244
  4,433
  4,632
  4,842
Total cash flow (excl. dividends), $m
  5,447
  5,585
  5,770
  5,951
  6,128
  6,303
  6,475
  6,646
  7,215
  7,941
  7,965
  8,751
  9,569
  10,419
  11,303
  12,221
  13,176
  14,167
  15,199
  16,272
  17,388
  18,550
  19,761
  21,022
  22,338
  23,710
  25,142
  26,637
  28,198
  29,830
Retained Cash Flow (-), $m
  -3,227
  -3,428
  -3,649
  -3,865
  -4,076
  -4,283
  -4,489
  -4,692
  -4,896
  -5,102
  -5,310
  -5,522
  -5,741
  -5,966
  -6,200
  -6,443
  -6,697
  -6,963
  -7,243
  -7,537
  -7,847
  -8,173
  -8,517
  -8,880
  -9,263
  -9,667
  -10,093
  -10,542
  -11,017
  -11,517
Prev. year cash balance distribution, $m
  506
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  2,727
  2,157
  2,121
  2,087
  2,053
  2,019
  1,986
  1,953
  2,319
  2,839
  2,655
  3,229
  3,829
  4,454
  5,103
  5,778
  6,478
  7,204
  7,956
  8,735
  9,541
  10,377
  11,244
  12,143
  13,075
  14,043
  15,049
  16,094
  17,182
  18,314
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  2,614
  1,975
  1,846
  1,718
  1,591
  1,465
  1,342
  1,221
  1,332
  1,488
  1,261
  1,378
  1,456
  1,495
  1,498
  1,468
  1,410
  1,327
  1,225
  1,110
  987
  861
  737
  618
  509
  410
  323
  249
  188
  138
Current shareholders' claim on cash, %
  95.6
  92.4
  89.9
  88.1
  86.9
  86.1
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6
  85.6

CME Group Inc., through its exchanges, provides products across all asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. The Company's segment primarily consists of the Chicago Mercantile Exchange Inc. (CME), Board of Trade of the City of Chicago, Inc. (CBOT), New York Mercantile Exchange, Inc. (NYMEX) and Commodity Exchange, Inc. (COMEX) exchanges. The Company provides electronic trading around the globe on its CME Globex platform. The Company also offers clearing and settlement services across asset classes for exchange-traded and over-the-counter derivatives through its clearinghouses CME Clearing and CME Clearing Europe. It also provides hosting, connectivity and customer support for electronic trading through its co-location services. The Company's CME Direct platform offers side-by-side trading of exchange-listed and privately negotiated markets.

FINANCIAL RATIOS  of  CME Group Cl A (CME)

Valuation Ratios
P/E Ratio 42.2
Price to Sales 18
Price to Book 3.2
Price to Tangible Book
Price to Cash Flow 37.8
Price to Free Cash Flow 39.9
Growth Rates
Sales Growth Rate 8.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -19.3%
Cap. Spend. - 3 Yr. Gr. Rate -6.1%
Financial Strength
Quick Ratio NaN
Current Ratio 1
LT Debt to Equity 11%
Total Debt to Equity 11%
Interest Coverage 28
Management Effectiveness
Return On Assets 2.3%
Ret/ On Assets - 3 Yr. Avg. 2%
Return On Total Capital 6.8%
Ret/ On T. Cap. - 3 Yr. Avg. 5.7%
Return On Equity 7.5%
Return On Equity - 3 Yr. Avg. 6.3%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 72.3%
EBITDA Margin - 3 Yr. Avg. 69.5%
Operating Margin 61.3%
Oper. Margin - 3 Yr. Avg. 59.3%
Pre-Tax Margin 63.6%
Pre-Tax Margin - 3 Yr. Avg. 59.8%
Net Profit Margin 42.7%
Net Profit Margin - 3 Yr. Avg. 38.8%
Effective Tax Rate 33%
Eff/ Tax Rate - 3 Yr. Avg. 35.2%
Payout Ratio 116.5%

CME stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CME stock intrinsic value calculation we used $3644.7 million for the last fiscal year's total revenue generated by CME Group Cl A. The default revenue input number comes from 0001 income statement of CME Group Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CME stock valuation model: a) initial revenue growth rate of 14.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CME is calculated based on our internal credit rating of CME Group Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of CME Group Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CME stock the variable cost ratio is equal to 38.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $-1 million in the base year in the intrinsic value calculation for CME stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for CME Group Cl A.

Corporate tax rate of 27% is the nominal tax rate for CME Group Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CME stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CME are equal to 383.6%.

Life of production assets of 132.1 years is the average useful life of capital assets used in CME Group Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CME is equal to -20.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $22411.8 million for CME Group Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 339.648 million for CME Group Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of CME Group Cl A at the current share price and the inputted number of shares is $65.1 billion.

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COMPANY NEWS

▶ CME Group Declares Quarterly Dividend   [Nov-07-18 05:31PM  PR Newswire]
▶ 7 Best Stocks to Buy as You Recalibrate Your Compass   [Nov-02-18 12:45PM  InvestorPlace]
▶ [$$] Market Cheats Getting Caught in Record Numbers   [Oct-31-18 07:46PM  The Wall Street Journal]
▶ [$$] U.S. Market-Manipulation Cases Reach Record   [07:02AM  The Wall Street Journal]
▶ CME Group's Efficiency Continues to Reward Investors   [Oct-30-18 10:33AM  Motley Fool]
▶ Best stock picks for volatility   [Oct-29-18 08:16AM  CNBC Videos]
▶ IBD Stock Of The Day CME Stays In Buy Zone Despite Market Correction   [Oct-26-18 04:02PM  Investor's Business Daily]
▶ CME: 3Q Earnings Snapshot   [07:27AM  Associated Press]
▶ Better Buy: CME Group Inc. vs. CBOE   [09:37AM  Motley Fool]
▶ The Most Spectacular Earnings Charts This Week   [Oct-22-18 06:04PM  Zacks]
▶ CME Group Announces First OTC SOFR Swaps Cleared   [Oct-09-18 11:30AM  PR Newswire]
▶ Dont Be Fooled by the Recent Surge of CME Stock   [Oct-08-18 11:49AM  InvestorPlace]
▶ [$$] CME Plans New WTI Contract With Houston Delivery   [09:15AM  The Wall Street Journal]
▶ Nvidia Leads 4 Top Stocks Trying To Reclaim Buy Points   [Sep-13-18 04:11PM  Investor's Business Daily]
▶ CME Group Announces Special Meeting of Shareholders   [Sep-11-18 12:10PM  PR Newswire]
▶ When To Sell Stocks: Why New Highs In Low Volume Can Halt A Big Run   [Sep-07-18 09:00PM  Investor's Business Daily]
▶ Bitcoin Remains Bearish as Cryptos Fall   [Aug-21-18 11:13AM  Investing.com]
▶ Cryptocurrencies Look Past UK Scam Warning, Head Higher   [Aug-17-18 01:54PM  Investing.com]
▶ CME Group Declares Quarterly Dividend   [Aug-08-18 05:18PM  PR Newswire]

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