Vertically Integrated Exchange Operator Scaling Beyond Its Options Roots

Miami International Holdings is a holding company that owns and operates U.S. securities and derivatives exchanges. Its core business is MIAX Options, a family of four options exchanges that list and trade equity options, ETF options, and index options on a proprietary, in-house-built matching engine. The company generates revenue from four principal lines:

• Transaction fees — per-contract fees charged to market makers and other participants for executions on MIAX venues. This is the largest revenue line and scales directly with volume and share.
• Market data and connectivity — proprietary data feeds, top-of-book and depth feeds, co-location, and port fees charged to member firms and data vendors.
• Listing and regulatory fees — listing fees on MIAX's own exchanges (including its proprietary indexes) plus member and regulatory fees.
• Other — including MIAX Pearl Equities, the MIAX Futures exchange, and licensing of the MIAX proprietary index suite.

Customers are broker-dealers, market makers, proprietary trading firms, and institutional asset managers. The company is founder-led, with management holding a meaningful ownership stake, and it competes directly with Cboe Global Markets, Nasdaq's options venues, NYSE Arca/Amex options, and the BOX exchange. Scale is meaningful but sub-scale relative to the largest exchange groups: at a $4.1B market cap on 99.23M shares outstanding and 93.61M of public float, MIAX is roughly one-tenth the market value of Cboe and a fraction of ICE or CME.

Near term (FY2027): Growth is primarily a function of (a) U.S. industry options volume, which has grown at a low-double-digit CAGR over the past several years and which we assume normalizes to mid-single-digit growth, and (b) MIAX share gains, particularly at the newer MIAX Sapphire venue. We model FY2027 revenue of $1.39B, up ~8% from our FY2026 estimate of $1.28B, with transaction revenue up ~7% and market data/connectivity up ~12%.

Medium term (FY2028–FY2029): The incremental drivers are MIAX Futures scaling toward a self-sustaining liquidity pool, MIAX Pearl Equities building share in a highly competitive U.S. cash equities market, and continued index-license and proprietary-product monetization. We model an ~9% revenue CAGR from FY2026 to FY2028, with operating margin expanding modestly from ~30% to ~32% as fixed technology costs are levered.

Key swing factors: retail options participation (a large share of industry volume growth), the direction of payment-for-order-flow-driven retail activity, and the cadence of new product launches on the futures venue.

FY2024 and FY2025 figures are illustrative reconstructions of historical trends; FY2026–FY2028 are our estimates.

The narrative is one of steady compounding rather than hypergrowth. Revenue growth has decelerated from the low-double digits toward the high-single digits as U.S. options volume growth normalizes, but the mix is improving: market data and connectivity, the highest-margin line, is growing roughly 12% annually, above the corporate average. Operating margin expansion of ~100bps per year is driven by operating leverage on a largely fixed technology and regulatory cost base, partially offset by continued investment in the futures and equities venues. Trailing EPS of $1.44 against a $41.09 price implies a 28.5x trailing multiple; on our FY2028 estimate of $2.01, the shares trade at roughly 20.4x, a level we view as reasonable but not compelling for a business with this margin profile.

The global exchange and market-infrastructure TAM is large and growing, with the U.S. listed-options market representing the most relevant slice for MIAX. U.S. options industry volume has expanded substantially over the past decade, and the addressable revenue pool — transaction fees, market data, connectivity, and clearing-related services — is measured in the several billions of dollars annually. Within that pool, MIAX competes for share of multi-listed options volume against a concentrated set of venues.

Competitive positioning: MIAX's differentiation rests on its proprietary technology (lower marginal cost per contract than venues paying third-party license fees), its market-maker incentive programs, and its newer venue launches designed to capture specific order-flow segments. Its principal disadvantage is scale: smaller share means less data revenue and less ability to spread fixed regulatory and technology costs.

Named comparables:

Our price target blends a discounted cash flow analysis with a comparable-company multiple approach.

DCF: We assume a ~9% revenue CAGR over the next five years tapering to ~4% terminal growth, operating margins expanding to the low-30s, a ~22% effective tax rate, and a weighted average cost of capital of roughly 9.5% (we note that Beta is not available for MIAX, so we use an exchange-sector proxy of ~0.9–1.0 unlevered). On a mid-single-digit-billion enterprise value base, this produces an intrinsic value per share in the low-to-mid $40s, broadly consistent with the current price.

Comparable multiples: Applying a 21–23x forward P/E to our FY2027 EPS estimate of $1.72 yields a range of roughly $36–$40; applying a 22–24x multiple to FY2028 EPS of $2.01 yields roughly $44–$48. Blending these with the DCF output produces our $44.00 target.

• Options volume cyclicality and retail-flow dependence. A meaningful share of recent industry options volume growth has come from retail participation, which is sensitive to equity market volatility and retail engagement. A sustained decline in retail options activity would pressure transaction revenue directly.
• Share pressure from larger, better-capitalized venues. Cboe, Nasdaq, and NYSE operate multiple options exchanges with deeper liquidity pools and larger market-maker networks. MIAX's newer venues face the classic cold-start problem of building liquidity against entrenched incumbents.
• Regulatory and fee-structure risk. Exchange transaction fees, access-fee caps, and market-data pricing are subject to SEC review and periodic industry litigation. Adverse rulemaking on access fees or market data would compress the highest-margin revenue line.
• Elevated short interest. With 6.79M shares short (8.60% of the 93.61M float) against average volume of 1.80M, the stock carries meaningful short-side positioning that could amplify moves around volume prints and earnings.
• Execution risk on futures and equities expansion. MIAX Futures and MIAX Pearl Equities require sustained investment to reach scale. If these venues fail to gain traction, the company absorbs the cost without the offsetting revenue, pressuring margins.