CBRE

We rate CBRE GROUP, INC. (CBRE) as a Hold with a composite score of 51.2/100 at a current price of $146.15. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in quality (69th percentile) and value (54th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (34th percentile) and stability (39th percentile) tempers our overall conviction. We assign a Narrow Moat rating (54/100), High uncertainty, and Poor capital allocation.

Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

CBRE GROUP, INC. holds a top-quartile position (#0 of 50) within the Finance, Insurance, And Real Estate sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 51.2/100 places it at rank #1823 in our full 7,333-stock universe. With a $46.9B market capitalization, CBRE GROUP, INC. operates at meaningful scale within the Finance, Insurance, And Real Estate sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 22%, though momentum at the 49th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 19% (-57.5pp vs sector) narrow to operating margins of 4% (-13.1pp vs sector) and net margins of 2.8%, yielding a gross-to-net conversion rate of 15%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $146.15, CBRE GROUP, INC. is trading near fair value based on current fundamentals. Our value factor score of 54/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 40.5x (a 240% premium to the sector median of 11.9x), EV/EBITDA of 19.6x (at a premium), P/B of 4.7x, P/S of 1.1x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a High uncertainty rating to CBRE GROUP, INC.. Key risk factors include significant leverage (231% debt-to-equity), below-average price stability (39th percentile), elevated valuation multiple (P/E 40.5x) that leaves limited margin for error. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: significant leverage (231% debt-to-equity); below-average price stability (39th percentile); elevated valuation multiple (P/E 40.5x) that leaves limited margin for error; the combination of leverage (231% D/E) and thin margins (2.8% net) amplifies downside risk. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 39th percentile and quality factor at the 69th percentile provide a quantitative summary of the overall risk landscape.

We identify limited risk mitigants at this time, which contributes to our high uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.

We rate CBRE GROUP, INC.'s capital allocation as Poor. Key concerns include elevated leverage (231% D/E). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — CBRE GROUP, INC. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, CBRE GROUP, INC. receives a Hold rating with a composite score of 51.2/100 (rank #1823 of 7,333). Our quantitative framework assigns a Narrow Moat (54/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 49/100.

Our analysis supports a neutral stance on CBRE GROUP, INC.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.