Using an unlevered Free Cash Flow to Firm (FCFF) model, we project CME Group Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 7.4% to 0.9% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 35, DPO 37, DIO 60). At a 7.9% WACC with mid-year discounting, the terminal value (83% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 19.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $326.45 per share, suggesting CME is fairly valued by 8.7% at the current price of $300.31.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 5,561 | 5,821 | 6,252 | 6,633 | 6,690 | 6,857 |
| (−) Net Interest | 200 | 209 | 225 | 238 | 240 | 246 |
| (+) D&A | 94 | 93 | 101 | 113 | 123 | 126 |
| EBITDA | 5,855 | 6,123 | 6,577 | 6,984 | 7,053 | 7,229 |
| (−) Tax | 1,260 | 1,319 | 1,417 | 1,503 | 1,516 | — |
| (−) CapEx | 122 | 127 | 137 | 145 | 146 | — |
| (−) ΔWC | 170 | 34 | 57 | 51 | 8 | — |
| Free Cash Flow (FCF) | 4,303 | 4,642 | 4,966 | 5,285 | 5,383 | — |
| Peers' EBITDA Multiple | 19.5x | |||||
| Terminal Value | 141,188 | |||||
| WACC / Discount Rate | 7.88% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 4,143 | 4,143 | 4,109 | 4,053 | 3,827 | 96,642 |
| Enterprise Value | 116,917 | |||||
| Projection Period | 20,275 | 17.3% | ||||
| Terminal Value | 96,642 | 82.7% | ||||
| (−) Current Net Debt | (666) | |||||
| Equity Value | 117,584 | |||||
| (÷) Outstanding Shares | 360M | |||||
| Fair Price | $326 | +8.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 15.5x | 17.5x | 19.5x | 21.5x | 23.5x |
|---|---|---|---|---|---|
| 5.9% | $295 | $325 | $355 | $386 | $416 |
| 6.9% | $283 | $312 | $341 | $369 | $398 |
| 7.9% | $272 | $299 | $326 | $354 | $381 |
| 8.9% | $261 | $287 | $313 | $339 | $366 |
| 9.9% | $250 | $275 | $300 | $325 | $351 |
Current price: $300.31. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.