CBRE GROUP, INC. (CBRE): what the price assumes

In the published model solve dated 2026-Q2, anchored at $150.82, CBRE GROUP, INC. (CBRE) is priced for +24.1% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/CBRE

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9.1% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

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.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.2%); the inversion above states its own rate.

Per-Model Detail (n=13)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• First-quarter 2026 revenue reached $10.5 billion against $8.9 billion a year earlier while consolidated net income rose to $318 million from $163 million, so profit grew several times faster than the top line (FY2026 Q1 10-Q).
• The trailing operating margin is 4.2%, and JLL and CWK both earn about 4.4%, which means the entire industry converts a small slice of a very large revenue number and small changes in cost swing the result hard.
• Second-quarter results are due before the open on July 29, 2026, the first test of the raised full-year outlook management issued in April.

Bull Case

Revenue rose 19% in the first quarter of 2026 and net income nearly doubled. Those two numbers do not usually travel together, and the gap between them is the whole bull case. Consolidated net income came to $318 million on revenue of $10.5 billion, against $163 million on $8.9 billion in the same quarter of 2025, per the FY2026 10-Q. On a business converting roughly four cents of every revenue dollar into operating profit, a revenue increase that outruns cost growth does not add to earnings. It multiplies them.

The mix behind that growth is the part worth understanding. The company built a Building Operations & Experience segment in 2025, stating in its FY2025 10-K that it was established to unify our building operations, workplace experience and property management capabilities across all property types. In the March quarter that segment grew revenue 20.4%, with the 10-Q attributing it to double-digit increases in facilities management, critical infrastructure and property management. Running someone else's buildings is contract revenue. It arrives whether or not anyone is buying or leasing space that quarter, which is a very different animal from a brokerage commission.

The quieter compounder inside the company is loan servicing. The 10-K notes that in the last seven years, we have organically grown our loan servicing revenue at a low-double digit compound annual growth rate, and it says organically, meaning without buying it. A servicing book is an annuity: the fee arrives every month for the life of the loan, the balance turns over slowly, and the cost to service the next loan is lower than the last one.

Cash conversion has followed. Operating activities produced $1,559 million of cash during 2025 per the 10-K, and management reported free cash flow of nearly $1.7 billion on a trailing twelve-month basis alongside first-quarter results. Some of that has gone into the share count, which has fallen about 3.1% a year over the last four years. Buying back stock in a services business is not empire-building; it is the cheapest acquisition available when the alternative is paying up for another regional brokerage.

Against the cohort, the growth is real rather than borrowed. NMRK grew 21.6% over its trailing year and JLL 11.2%, while CWK managed 10.4%; CBRE's 19% first-quarter pace sits at the top of that range, and it came with net income more than doubling rather than with margin sacrifice. In an industry where everyone earns roughly the same thin margin, the operator adding revenue fastest is compounding the fastest, and scale in facilities management is genuinely self-reinforcing: the more buildings you already run, the cheaper the next portfolio is to absorb.

Bear Case

JLL, Cushman & Wakefield and Newmark are pursuing exactly the same mandates, with exactly the same pitch, and the numbers show how little separates them. JLL earns a 4.42% operating margin on $26.76 billion of revenue; CWK earns 4.42% on $10.54 billion; NMRK earns 8.01% on $3.48 billion while growing 21.6%. CBRE earns 4.2%. When four firms competing for the same business all land within a couple of points of each other, that is not a coincidence and it is not a moat. It is a commodity service industry where the product walks out of the building every evening. The FY2025 10-K concedes the shape of it, warning of global competitors across all of our business lines and the geographies that we serve and that further industry consolidation, fragmentation or innovation could lead to significant future competition.

The demand side is not under the company's control either. The filing states plainly that the revenues in all of our businesses are dependent to some extent on the overall volume of activity (and pricing) in the commercial real estate market, and that the capital markets, development and loan servicing lines are sensitive to credit cost and availability as well as financial liquidity. It also names the specific way clients cut: client actions to restrain project spending and reduce outsourced staffing levels. Facilities contracts look durable until a tenant decides to run half as many square feet.

Which brings the price into it. At roughly 30 times operating income, the market is asking for company-wide operating growth held at its self-funding ceiling for about 5.7 years. That is not an impossible rate; the company has recently delivered comparable growth. The stretch is the duration. Of comparable fast-growers, only about 27% sustained that pace across a similar stretch, and the priced-in assumption reads as elevated against what the fundamentals comfortably support. The thin margin is what makes the arithmetic unforgiving in reverse: if revenue growth stalls at a 4.2% operating margin, operating profit does not flatten, it falls, because the cost base does not shrink as fast as a transactional revenue line does.

The balance sheet carries real weight for a services firm. On a funded-debt basis net debt runs about 4 times operating profit, roughly 6.5 billion dollars against 8.2 billion dollars of gross borrowings. Count the operating lease obligations that come with occupying offices in hundreds of markets and the net obligation is closer to 8.9 billion dollars. In April the company priced 750 million dollars of 5.250% senior notes due 2036, using about 737 million dollars of proceeds to repay commercial paper. Terming out short-term borrowing is prudent housekeeping. It also fixes a higher cost for a decade.

The floor under the downside is thin but real. The company holds about 864 million dollars of equity stakes outside the operating businesses, roughly 2% of the equity market value. That is the boundary if the operating thesis impairs, and it is worth naming precisely because it is small: at this price, essentially all the value being bought is the forward earnings of a cyclical services business, with almost nothing sitting behind it on the balance sheet.

Valuation

A services business converting 4.2% of revenue into operating profit is priced on volume, not on profitability, and that framing explains almost everything about where the methods land. Today's price works out to about 30 times operating income, which implies company-wide operating growth held at its self-funding ceiling for roughly 5.7 years. Treat the number as directional; it comes from one solve under fixed assumptions. What it says is that the market is extrapolating the current expansion for most of a decade, and only about 27% of comparable fast-growers have carried a pace like that across a comparable stretch.

The methods split along a line that makes sense for the business model. The price sits roughly 129% above where the asset-value approaches come out and about 103% above the earnings-power lens that capitalizes current profit with no growth credited. Book value per share is $28.69, which for a company whose productive assets are client contracts, a servicing book and about a hundred thousand employees tells you very little; a balance sheet cannot hold the value of a facilities management relationship. The peer-multiple approaches land essentially level with the quote, and the forward cash flow approaches land above it. So the price is defended by the lenses that credit continued growth and unsupported by the lenses that do not, which is the ordinary signature of a growth-priced compounder rather than a mispricing in either direction.

The concrete version of what has to be true sits in the margin. Operating margin runs 4.2%, and this is not a company-specific shortfall: JLL is at 4.42% and CWK at 4.42% on their own reported figures. Margin expansion is therefore not the lever the price is betting on. Volume is. Annual revenue of roughly 42.2 billion dollars has to keep compounding, and the first quarter delivered exactly that, with revenue of $10.5 billion against $8.9 billion. The question the report cannot settle is whether a transaction-sensitive business sustains that pace for that long, because the answer depends on credit conditions the filing itself says the company does not control.

Leverage bounds it. Net debt runs about 4 times operating profit on the funded-borrowing build, and closer to a fifth more than that once the operating leases behind hundreds of offices are counted; either way the company is not over-borrowed, but it is not cash-rich either. Free cash flow of nearly $1.7 billion on a trailing basis and a share count falling about 3.1% a year say the cash is real and is being returned. Outside the operating businesses sit about 864 million dollars of equity stakes, close to 2% of the market value, which is the only part of this price that does not depend on next year's transaction volume.

Catalysts

The July print lands first. Second-quarter results are scheduled for release around 6:55 a.m. Eastern on July 29, 2026. It follows a first quarter that beat hard: revenue of $10.53 billion, up 19% year over year, GAAP earnings per share of $1.07 against roughly half that a year earlier, and a raised full-year 2026 outlook for the company's own core earnings measure of $7.60 to $7.80 a share. Because that core measure excludes items the reported figure carries, the two are not interchangeable and the guidance range should be read on its own basis.

Two commercial developments are worth tracking because they extend the business into revenue that does not depend on leasing volume. In April the company launched a LevelUp training program with Meta to build a pipeline of fiber technicians for U.S. data center construction, and in June it unified its Asia-Pacific flexible-workspace portfolio under the Industrious brand, reporting global expansion of 58% since acquiring the business in 2025. Data center construction labor and flexible workspace are both structurally growing categories, and both attach to the project management and building operations lines rather than to brokerage.

Capital deployment has stayed active on both sides of the balance sheet. The company priced 750 million dollars of 5.250% senior notes due 2036 in April, applying roughly 737 million dollars to repay commercial paper. On the investment side, its Accelerate infrastructure vehicle passed $1.25 billion in equity commitments across more than 400 sites in May, and in July the firm arranged over $150 million of commercial property-assessed clean energy financing for amphitheater projects in Oklahoma and Texas. None of these individually moves a $41.4 billion company. Together they show where management is choosing to add capacity.

Peer Cohorts (Per Segment, With Filing Citations)

Advisory Services (reported)

• CWK (CUSHMAN & WAKEFIELD LTD.)
• FY2025 10-K: …revenue. Valuation and other services Valuation and advisory fees are earned upon completion of the service, which is generally upon delivery of a preliminary or final appraisal report. Consulting fees are recognized when earned under the provisions of the client contracts, which is generally upon completion of…
• FY2025 10-K: …may be based on hours incurred, a percentage mark-up on actual costs incurred or a percentage of monthly gross receipts. Additionally, this service line has a large component of revenue that consists of us contracting with third-party providers (engineers, landscapers, etc.) and then passing these expenses on to our…
• JLL (Jones Lang LaSalle Incorporated)
• FY2025 10-K: …agreements provide for incentive compensation relating to operating expense reductions, gross revenue or occupancy objectives, or tenant satisfaction levels. Consistent with industry norms, management contract terms typically range from one to three years, although some contracts can be terminated at will at any time…
• FY2025 10-K: …including product positioning, target tenant identification and competitor analysis through to securing tenants and negotiating leases with terms that reflect our clients' best interests. In 2025, we completed approximately 19,500 agency leasing transactions representing 340 million square feet of space. Tenant…
• CIGI (Colliers International Group Inc.)
• FY2025 40-F: …to which the Company has a right to invoice. For other advisory services, including Valuation, the customer is unable to benefit from the services until the work is substantially complete. Revenue is recognized upon delivery of deliverables to the customer because this faithfully represents when the service has been…
• FY2025 40-F: …real estate properties. Such services may involve appraisals of single properties or portfolios of properties. These appraisals may be utilized for a variety of customer needs including acquisitions, dispositions, financing, financial reporting, litigation or for tax purposes. Loan servicing fees consist of revenues…
• NMRK (NEWMARK GROUP, INC.)
• FY2025 10-K: …due diligence, data management, transaction support, performance analytics, fund administration, and commercial real estate title and escrow services. We also offer these clients cost-effective and flexible staffing solutions through both on-site and off-site teams. We believe these largely recurring revenue…
• FY2025 10-K: …from stockholders, clients, customers and policy makers with respect to the Company's corporate responsibility practices may result in additional costs or risks. • We face increasing financial, regulatory, and transitional risks associated with the effects of climate change. 10 PART I ITEM 1. BUSINESS Throughout this…
• WD (Walker & Dunlop, Inc.)
• FY2025 10-K: …or overseeing the following activities: ​ ● carrying out all cashiering functions relating to the loan, including providing monthly billing statements to the borrower and collecting and applying payments on the loan; ● administering reserve and escrow funds for repairs, tenant improvements, taxes, and insurance; ●…
• FY2025 10-K: …all loans we originate for Fannie Mae, Freddie Mac, HUD, and some loans we broker. We earn servicing fees for performing certain loan servicing functions such as processing loan, tax, and insurance payments and managing escrow balances. Servicing generally also includes asset management functions, such as monitoring…
• BEKE (KE Holdings Inc.)
• FY2025 20-F: …online and offline access to an extensive and authentic property listing database and to, together with the brokerage brands, stores and agents on our platform, provide convenient and secure housing transactions and services experience and satisfactory services to our customers. Interruptions or failures in the…
• FY2025 20-F: …provide that brokerage service fees should be determined through negotiations by all parties involved in the transaction, taking into account various factors, such as scope of services, quality of service and market supply-demand dynamics. Real estate agencies should reasonably reduce the service fees of housing…

Building Operations & Experience (reported)

• CWK (CUSHMAN & WAKEFIELD LTD.)
• FY2025 10-K: …service lines. Depending on the geography or service, we face competition from other commercial real estate services providers, outsourcing companies, in-house corporate real estate departments, institutional lenders, insurance companies, investment banking firms, investment managers, accounting firms and consulting…
• FY2025 10-K: …including a relatively higher number of large transactions, as occupiers continue to trend towards newer, higher-grade buildings with top-tier employee experiences. Capital markets revenue increased 18% primarily due to growth across all asset classes and deal sizes, with particular strength in the office, industrial…
• JLL (Jones Lang LaSalle Incorporated)
• FY2025 10-K: AFFECT DEMAND FOR OUR SERVICES AND CLIENT PORTFOLIOS. The ongoing evolution of corporate workplace strategies continues to alter how companies use real estate, impacting demand across asset types, particularly the office sector. As organizations seek to optimize their portfolios for cost, efficiency, and employee…
• FY2025 10-K: For event-driven point-in-time transactions, we record revenue when our performance obligation is complete, such as the delivery of a report to the client, whereas revenue is recorded over time for services with a continuous transfer of control to our clients. Leasing Advisory Leasing Leasing revenue is earned from…
• CIGI (Colliers International Group Inc.)
• FY2025 40-F: …real estate properties. Such services may involve appraisals of single properties or portfolios of properties. These appraisals may be utilized for a variety of customer needs including acquisitions, dispositions, financing, financial reporting, litigation or for tax purposes. Loan servicing fees consist of revenues…
• FY2025 40-F: …services rendered transfers to a customer when a sale and purchase agreement becomes unconditional and that of leasing services rendered transfers to a customer when a lease between the landlord and the tenant is executed. At these points in time, the customer has received substantially all of the benefit of the…
• FSV (FirstService Corporation)
• FY2025 40-F: …The loan amounts are measured based on the formula price of the underlying non-controlling interests, and interest rates are determined based on market rates plus a spread. The loans generally have terms of 5 to 10 years, but are open for repayment without penalty at any time. Page 26 of 28 19. Segmented information…
• FY2025 40-F: …for the fees associated with the services performed on a straight line basis over the period the services are performed. The Company also provides additional services outside the scope of the property and amenity management services at the request of a customer which represents a distinct performance obligation.…
• ABM (ABM INDUSTRIES INCORPORATED)
• FY2025 10-K: …or airplane cabins cleaned). Hourly In hourly arrangements, the client is billed a fixed hourly rate for each labor hour provided. Management Reimbursement Under these parking arrangements, we manage a parking facility for a management fee and pass through the revenue and expenses associated with the facility to the…
• FY2025 10-K: …are responsible for most operating expenses incurred. We measure progress toward satisfaction of the performance obligation as the services are provided, and revenue is recognized over time, because the customer simultaneously receives and consumes the benefits of the services as they are performed. Rental expense…

Project Management (reported)

• ACM (AECOM)
• FY2025 10-K: …to internal-use software. The guidance removes references to project stages used in ASC 350-40 and clarifies the threshold entities should apply to begin capitalizing internal-use software costs. The new guidance is effective for us starting October 1, 2028, and we may apply the guidance using a prospective,…
• FY2025 10-K: …assets on the consolidated balance sheet. Revenue recognition relating to claims is highly judgmental as the amount has not been approved by the customer and it requires the Company to prepare estimates of amounts expected to be recovered. Changes in recovery estimates can have a material effect on the amount of…
• J (JACOBS SOLUTIONS INC.)
• FY2025 10-K: …services transferred to the customer. Subcontractor materials, labor and equipment and, in certain cases, customer-furnished materials and labor and equipment are included in revenue and cost of revenue when management believes that the company is acting as a principal rather than as an agent (e.g., the company…
• FY2025 10-K: …the Company's controls over the estimation process that affect revenue recognized on fixed-price contracts. For example, we tested controls over management's monitoring and review of project cost estimates, including the Company's procedures to validate the completeness and accuracy of the data used to determine the…
• TTEK (TETRA TECH, INC.)
• FY2025 10-K: …completed to date. Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term. The principal consideration for our determination that performing procedures relating to revenue recognition for certain…
• FY2025 10-K: …Our solutions may span the entire life cycle of high-end consulting and engineering projects and include applied science, data analysis, research, engineering, design and project management. We manage our operations under two reportabl e segments. Our Government Services Group ("GSG") reportable segment primarily…
• EME (EMCOR Group, Inc.)
• FY2025 10-K: …period, we selected a sample of contracts and performed procedures to test the project revenue and cost forecasts. For example, we obtained and inspected the related contract agreements, amendments, and change orders to test the existence of customer arrangements and understand the scope and pricing of the related…
• FY2025 10-K: …Cost and scheduling estimates are based on a number of assumptions, including those about future economic conditions, commodity and other materials pricing, job-site productivity, cost and availability of labor, equipment, and materials, and supply chain efficiency, among other factors. 10 Table of Contents However,…
• KBR (KBR, Inc.)
• FY2025 10-K: $16.9 billion. Of this amount, we currently estimate that 83% will be recognized in revenues on our consolidated statement of operations and 17% will be recorded by our unconsolidated joint ventures. We cannot guarantee that the revenues projected in our backlog will be realized or that the projects will be…
• FY2025 10-K: …the experience, relationships, and past performance to compete with us on future contracts and potential result in contract losses. If subcontractors fail to timely meet their contractual obligations or have regulatory compliance or other problems, our ability to fulfill our obligations as a prime contractor or…
• HURN (HURON CONSULTING GROUP INC.)
• FY2025 10-K: ), enterprise resource planning ("ERP"), enterprise performance management ("EPM"), and customer relationship management ("CRM") systems; data management, AI and automation; technology managed services; and payor core F-39 Table of Contents HURON CONSULTING GROUP INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS…
• FY2025 10-K: …for improving operational and cost effectiveness in the areas we review. Second, we earn a success fee when and if certain predefined outcomes occur. We recognize revenue under performance-based billing arrangements using the following steps: 1) estimate variable consideration using either the expected value method…

Real Estate Investments (reported)

• BAM (BROOKFIELD ASSET MANAGEMENT LTD.)
• FY2025 10-K: …distressed liquid credit, rescue financings, debtor-in-possession loans, bankruptcy exits, loan portfolios, platform investments, and opportunistic capital solutions in key economic regions across the globe. • Brookfield Infrastructure Debt is our infrastructure debt fund series, which invests on behalf of our…
• FY2025 10-K: …of space or a reduction in demand for real estate in the markets in which we operate), the attractiveness of the properties to tenants, competition from other landlords and our ability to provide adequate maintenance at an economical cost. Certain expenditures, including property taxes, maintenance costs, mortgage…
• BX (Blackstone Inc.)
• FY2025 10-K: …where we see outsized growth potential driven by global economic and demographic trends. BREP has made significant investments in logistics, data centers, rental housing, hospitality, office and retail properties around the world, as well as in a variety of real estate operating companies. 7 Table of Contents Our…
• FY2025 10-K: …Real Estate Investments - The fair values of real estate investments are determined by considering projected operating cash flows, sales of comparable assets, if any, and replacement costs, among other measures and considerations. The methods used to estimate the fair value of real estate investments include the…
• ARES (ARES MANAGEMENT CORPORATION)
• FY2025 10-K: 025 and 2024, the Company had cash balances with financial institutions in excess of Federal Deposit Insurance Corporation insured limits. The Company monitors the credit standing of these financial institutions. Investments Held in Trust Account Investments held in trust account represents funds raised through the…
• FY2025 10-K: …has elected to be treated as a corporation for U.S. federal tax purposes, each of the other five companies has 32 Table of Contents elected, for U.S. federal tax purposes, to be treated as a regulated investment company ("RIC") under Subchapter M of the U.S. Internal Revenue Code of 1986, as amended (the "Code").…
• APO (APOLLO GLOBAL MANAGEMENT, INC.)
• FY2025 10-K: …7 for the respective investment type. Other Investments Other investments include, but are not limited to, term loans collateralized by mortgages on residential and commercial real estate, other uncollateralized loans, investments in real estate, corporate owned life insurance, and investments in low-income housing…
• FY2025 10-K: Contributions paid or distributions received by Athene are recorded directly to the investment fund balance as an increase to carrying value or as a return of capital, respectively. Policy Loans Policy loans are funds provided to policyholders in return for a claim on the policyholder's account balance. The funds…
• KKR (KKR & Co. Inc.)
• FY2025 10-K: …cost basis for which losses are estimated. Policy Loans Policy loans are loans policyholders take out against their life insurance policies. Each policy loan is fully collateralized by the cash surrender value of the policyholder's life insurance policy. Policy loans are carried at unpaid principal balances. Interest…
• FY2025 10-K: …line for which we have the ability to earn carried interest. This data does not reflect acquisitions or disposals of investments, changes in investment values, or distributions occurring after December 31, 2025 . Investment Period Amount ($ in millions) Start Date (1) End Date (2) Commitment (3) Uncalled Commitments…
• OWL (BLUE OWL CAPITAL INC.)
• FY2025 10-K: …have similar investment objectives to us, which may create additional competition for investment opportunities. Some of these competitors may also have a lower cost of capital and access to funding sources that are not available to us, which may create competitive disadvantages for us with respect to investment…
• FY2025 10-K: …U.S. federal regulations. In addition, state attorneys general may in some cases bring actions to enforce federal consumer protection laws. Depending on how governmental authorities elect to exercise their statutory authority, it could increase the compliance costs for the companies that our alternative credit…

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.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• 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.