BGC Group, Inc. (BGC): what the price requires
At today's price, BGC Group, Inc. (BGC) is priced for today's economics sustained for ~8.1 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Exported: 2026-07-20 · Source: https://boothcheck.com/report/BGC
Headline
| Field | Value |
|---|---|
| Ticker | BGC |
| Company | BGC Group, Inc. |
| Current price | $10.92/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | fee-financial |
| Top-of-range earnings growth must hold for | 8.1y |
| Price-to-earnings | 43.1x |
| Earnings yield | 2.3% |
Solve inputs: computed at a 10.5% cost of equity; growth searched up to the 20% fee-earnings ceiling; each 1pp moves the implied horizon ~1.7 years.
Reconcile: at the x-ray's 9.3% required return this reads ~6 years; the models below use their own rates.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | -0.17σ |
| cohort percentile (of 49 peers) | 98 |
| sustained it ~8.1 years at this level | 18% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.24x | 4 | expensive |
| Earnings | 1.61x | 3 | expensive |
| Relative | 0.81x | 4 | justifies |
| Growth | 0.58x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.8%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $45.15 | 0.24x | yes | FCF base $0.4B, growth 25% (input: historical growth), terminal g 4.0%, WACC 7.8%, 7yr projection |
| DCF Exit Multiple | Growth | $18.95 | 0.58x | yes | Exit EV/EBITDA: 238.8x / 241.8x / 244.8x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $7.79 | 1.40x | yes | P/E 16.93x (blended: static sector reference 12x + trailing (TTM) 28x), scenarios: 13.5x / 16.9x / 20.3x (bear / base = reference held flat / bull), EV/EBITDA N/Ax |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $4.15 | 2.63x | yes | BV/sh $2.30, ROE (TTM) 16.7%, ke 9.3% |
| Two-Stage Excess Return | Asset | $5.51 | 1.98x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $15.84 | 0.69x | yes | Rev $3.2B, growth 30% (input: historical growth; tapered), Terminal P/S: 1.3x / 1.6x / 1.9x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $12.95 | 0.84x | yes | EPS $0.37, growth 35% (input: historical EPS growth), PEG=0.81 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $5.56 | 1.96x | yes | BV $2.30 + 5yr PV of (ROE (TTM) 16.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $4.37 | 2.50x | yes | √(22.5 × EPS $0.37 × BVPS $2.30) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | — |
| FCF Yield | Earnings | $6.78 | 1.61x | yes | FCF $392.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $11.94 | 0.91x | yes | EPS $0.37 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $20.24 | 0.54x | yes | Revenue $3.23B × sector P/S 3.0x |
| PEG Fair Value | Relative | $13.88 | 0.79x | yes | EPS $0.37 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $4.00 | 2.73x | yes | EPS $0.37 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $995.9m |
| Net debt / NOPAT (after-tax) | 4.53x |
| Net debt / operating income (pre-tax) | 3.27x |
| Share count CAGR (buyback) | -1.2% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- BGC Group is an interdealer broker remaking itself into an exchange operator, and the transition is showing: first-quarter revenue hit a record $955.5 million, up 43.8%, with its FMX Futures Exchange posting its best quarter ever.
- The price assumes the transformation works, trading near 48 times earnings, a level that implies fee earnings grow near the top of the range for roughly a decade.
- The swing factors are FMX adoption and market volatility: FMX captured 41% share in U.S. Treasury trading last quarter, but management guided second-quarter revenue lower to $785 to $845 million on tougher comparisons after a volatile first quarter.
Bull Case
BGC is best understood by its stage: it is a mature interdealer broker in the middle of becoming something more valuable, an exchange operator. The legacy business is voice and electronic brokerage across rates, credit, foreign exchange, energy, and equities, a steady, cash-generative franchise. The growth story layered on top is FMX, BGC's own futures and U.S. Treasury trading platform, which is the kind of asset that, if it reaches scale, earns exchange-like economics rather than broker-like ones. The 10-K describes the breadth of the base, noting BGC offers brokerage in five broad product categories: ECS, Rates, FX, Credit, and Equities, and provides market data products for selected financial institutions. That diversified, recurring brokerage base funds the bet on FMX.
The quarter shows both engines firing. Total revenue reached a record $955.5 million, up 43.8% year over year, with pre-tax adjusted earnings of $232.1 million, up 44.9%. The energy brokerage business, ECS, more than doubled to $330 million, reinforcing BGC's position as the world's largest energy broker. But the headline is FMX: it posted its best quarter ever, with FMX U.S. Treasury average daily volume up 51% to a record $90 billion, representing 41% market share, and FMX FX volume up 42% to $20.5 billion. A 41% share in Treasury trading is not a science project; it is a platform that has reached genuine scale against entrenched incumbents.
The reframe is what FMX could become. If BGC succeeds in building FMX into a credible challenger across Treasuries, FX, and futures, the company stops being valued as a broker, a low-multiple, cyclical fee business, and starts being valued for the durable, high-margin economics of an exchange. Exchanges earn recurring transaction and data revenue with structural network effects, which is why they command premium multiples. Management is also executing on costs, building on a prior program to reach $35 million of annualized savings. The bull case is that a steady brokerage base is funding the construction of an exchange, and the early FMX share gains suggest the construction is working.
Bear Case
The variable with the most leverage on BGC is market volatility, and it cuts both ways. Brokerage revenue rises when markets are active and trading volumes surge; it falls when they calm. The record first quarter rode a volatile rates and macro environment, and management was candid that the second quarter would normalize lower, guiding to revenue of $785 million to $845 million on tougher comparisons after a volatile first quarter. That is the structural problem with pricing a broker at a premium: the earnings that justify the multiple are partly a function of conditions BGC does not control, and conditions revert. A price set during a volatility spike is exposed when the spike fades.
The FMX bet, which is most of the bull case, faces formidable competition. Challenging incumbent exchanges in U.S. Treasury futures and trading means going up against deeply entrenched venues with decades of liquidity network effects, the hardest moat in finance to dislodge. FMX has won impressive early share, but early share against a slow-moving incumbent is different from sustained share once the incumbent responds, and exchange competition is a war of liquidity attrition that favors the established player. If FMX plateaus below the scale needed for true exchange economics, the company remains a broker carrying an exchange's valuation.
That valuation is the crux of the bear case. At about 48 times earnings, a 2.1% earnings yield, the price assumes fee earnings grow near the top of their range for roughly a decade. The relative-multiple and growth-DCF methods justify the price, but the asset-based and earnings-power lenses say expensive, the asset read at nearly two and a half times the static value. The price is already crediting the FMX transformation as if it has succeeded. BGC also carries net debt around $996 million, roughly 3.3 times operating income, so the balance sheet is not pristine. The bear is that a cyclical broker, dependent on volatility and fighting entrenched exchanges, is priced for a transformation that is promising but unproven, leaving little room if FMX stalls or volatility recedes.
Valuation
BGC is a fee business, so the price is read off its earnings, and at about 48 times earnings, a 2.1% earnings yield, the level is demanding. The inversion frames it as fee earnings needing to grow near the top of their range for roughly a decade. That is an aggressive assumption for a brokerage whose revenue swings with market volatility, and it only makes sense if you credit the FMX exchange ambition rather than the steady-state broker.
The methods disagree in the now-familiar pattern for a transformation story. The relative-multiple and growth-DCF families reach the price, valuing BGC on its growth and against peers; the asset-based and earnings-power lenses say expensive, the asset read at nearly two and a half times the static value. When the forward-looking families justify the price and the backward-looking ones do not, the market is paying for what BGC could become, an exchange operator earning premium economics, rather than what it currently is, a cyclical broker. The premium is the optionality on FMX reaching scale.
On the balance sheet, the relevant lens for a broker is funding and capital adequacy rather than industrial leverage, though BGC's net debt of about $996 million at roughly 3.3 times operating income is more than a capital-light pure broker would carry, reflecting its investment in building out FMX. The downside boundary is the durability of the legacy brokerage cash flows, which fund the transformation, and the company's ability to keep returning capital while investing. The bet a buyer accepts at this price is that FMX crosses from impressive early share into sustained exchange-scale economics; absent that, a 48-times multiple on a volatility-dependent broker has substantial room to compress.
Catalysts
BGC Group posted record first-quarter results. Total revenue rose 43.8% year over year to $955.5 million, pre-tax adjusted earnings climbed 44.9% to $232.1 million, and GAAP net income available to common stockholders was $84.1 million. Excluding the OTC business, revenue grew 23% to a record $817 million, and energy brokerage revenue more than doubled to $330 million.
FMX was the standout. The exchange posted its best quarter ever, with FMX U.S. Treasury average daily volume up 51% to a record $90 billion and 41% market share, and FMX FX volume up 42% to $20.5 billion, alongside growth in SOFR futures and rising open interest. The continued share gains in Treasuries are the central proof point for the exchange transformation.
Management's second-quarter guidance set expectations for normalization: revenue of $785 million to $845 million and pre-tax adjusted earnings of $178 million to $196 million, citing tougher comparisons after a volatile first quarter. BGC also expects $35 million of annualized cost savings from its expanded reduction program. The developments to watch are FMX's continued share trajectory and any new product launches, the level of market volatility driving brokerage volumes, and whether the exchange reaches the scale that would re-rate the company from broker to exchange economics.
Peer Cohorts (Per Segment, With Filing Citations)
Brokerage services (consolidated) (reported)
- MKTX (MARKETAXESS HOLDINGS INC.)
- (no filing in the citation store)
- TW (Tradeweb Markets Inc.)
- (no filing in the citation store)
- VIRT (Virtu Financial, Inc.)
- (no filing in the citation store)
- LPLA (LPL Financial Holdings Inc.)
- (no filing in the citation store)
- PIPR (PIPER SANDLER COMPANIES)
- (no filing in the citation store)
- IBKR (INTERACTIVE BROKERS GROUP, INC.)
- (no filing in the citation store)
- FRHC (FREEDOM HOLDING CORP.)
- (no filing in the citation store)
- HOOD (Robinhood Markets Inc)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
BGC Group Q1 2026 results · BGC Group Q1 2026 earnings call