CBIZ, Inc. (CBZ): what the price requires

At today's price, CBIZ, Inc. (CBZ) is priced for -4.5% growth. 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: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/CBZ

Headline

FieldValue
TickerCBZ
CompanyCBIZ, Inc.
Current price$40.29/sh
CompositionFinancial Services 83% / Benefits and Insurance Services 15% / National Practices 2%

What The Price Requires (Inversion)

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

FieldValue
Inversion basiswhole-company
Implied growth-4.5%
Multiple paid17x operating income

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.3pp (computed at the 7% minimum rate; the CAPM rate 4.8% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~10.7%/yr; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.51σ
cohort percentile (of 210 peers)43
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based 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.

FamilyMedian price/FVModelsReads
Asset2.23x4expensive
Earnings1.36x2expensive
Relative0.91x5justifies
Growth0.59x2justifies

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

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.8%); the inversion above states its own rate.

Per-Model Detail (n=13)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth——no—
DCF Exit MultipleGrowth$81.750.49xyesExit EV/EBITDA: 13.8x / 16.8x / 19.8x (bear / base = today's held flat / bull), 7yr
Relative ValuationRelative$36.561.10xyesP/E 20x (static sector reference · 2026-04), scenarios: 16.0x / 20.0x / 24.0x (bear / base = reference held flat / bull), EV/EBITDA 14x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$19.912.02xyesBV/sh $28.10, ROE (TTM) 6.6%, ke 9.3%
Two-Stage Excess ReturnAsset$16.512.44xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$58.460.69xyesRev $2.8B, growth 30% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.9x / 1.1x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$44.070.91xyesEPS $1.83, growth 24% (input: historical EPS growth), PEG=0.91 (Undervalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$1.9320.88xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.14B × (1−21%) / WACC 5.8% → EPV (no growth) (excluded from median)
Residual IncomeAsset$16.042.51xyesBV $28.10 + 5yr PV of (ROE (TTM) 6.6% − Kₑ 9.3%) × BV; BV grows 4.3%/yr
Graham NumberAsset$34.021.18xyes√(22.5 × EPS $1.83 × BVPS $28.10) — Graham's conservative floor
EV/EBITDA RelativeRelative$28.921.39xyesEBITDA $0.26B × sector EV/EBITDA 14.0x
FCF YieldEarnings$1.3928.99xyesFCF $175.5M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings$0.014029.00xyesSBC-adj FCF $0.15B (FCF $0.18B − SBC $0.03B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$59.050.68xyesEPS $1.83 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$65.980.61xyesRevenue $2.76B × sector P/S 1.5x
PEG Fair ValueRelative$66.110.61xyesEPS $1.83 × (PEG 1.5 × growth 24.1% (input: historical EPS growth)) → PE 36.1x
Earnings YieldEarnings$19.782.04xyesEPS $1.83 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$1.5b
Net debt / NOPAT (after-tax)8.16x
Net debt / operating income (pre-tax)6.44x
Share count CAGR (dilution)4.2%
Burning cashno

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

Bullet Takeaways

Bull Case

CBIZ took on real leverage to become much larger, and the balance-sheet decision is the place to start because it reveals how management sees the opportunity. The firm carries net debt of about $1.5 billion now, the cost of acquiring Marcum and roughly doubling the business, and it is leaning into that bet rather than retreating from it: over the first four months of 2026 it completed two buyback programs for about 3.9 million shares and $200 million. A management team that levers up for a transformational deal and then buys back stock is signaling conviction that the combined firm earns more than its cost of capital once integration settles.

The underlying business is the kind that supports that confidence, because professional-services revenue is sticky and recurring. CBIZ does not sell one-off projects so much as ongoing relationships: tax compliance, benefits administration, retirement-plan services, and insurance brokerage that renew year after year. The 10-K describes the model as embedding "in local and regional markets, building meaningful relationships to better understand our clients' businesses" and cross-serving them across services. Each additional service sold to an existing client deepens the relationship and raises switching costs, which is why the firm has compounded for years by acquiring practices and then selling the rest of its menu into the acquired client base.

Marcum is that strategy at its largest scale, and it widens the cross-serving runway considerably. The financial-services segment, the accounting and tax core, showed modest growth in the first quarter, and management raised its full-year adjusted EBITDA target to $465 million to $475 million and adjusted EPS to $4.00 to $4.10 while reaffirming revenue of $2.8 billion to $2.9 billion. The relative-multiple and growth methods support the current price; the asset and earnings-power lenses read it as expensive mainly because the recent reported returns are depressed by integration costs, which the bull case expects to fade.

Bear Case

The structural truth a CBIZ holder should sit with is that the growth is barely there and the headline earnings flattered it. First-quarter revenue rose only about 1.3%, with organic growth near 1%, as lower benefits-and-insurance revenue offset modest financial-services gains. And the net income that looked like a leap, $2.63 per share against $1.91, was boosted by a roughly $58 million one-time gain from acquisition-related adjustments tied to Marcum. Strip the gain out and the underlying operating margins actually softened as integration, technology, and facility costs rose. A firm that grew the top line 1% and needed a one-time accounting gain to show earnings growth is not, on its current trajectory, the compounder the price assumes.

The integration risk is concrete and disclosed. Marcum was a large, privately held firm, and the 10-K warns plainly that because "Marcum's internal control over financial reporting has not previously been subject to audit, additional material weaknesses could be discovered." Beyond the controls question, professional-services mergers run on retaining people, and the firm concedes it "cannot assure you that we will be able to retain the services of such personnel" given a competitive employment market and the limited enforceability of non-competes. Partner and client attrition is the classic failure mode of an accounting-firm merger, and the soft organic growth suggests some of that attrition is already happening.

The leverage turns those execution risks into financial ones. Net debt near $1.5 billion is roughly 6 times operating income, with interest covered only about 2.2 times, which is thin for a business now absorbing integration costs and client attrition at the same time. Liquid assets are minimal. Meanwhile the share count has risen about 4% as Marcum was partly stock-funded, so the aggressive buyback is partly offsetting that dilution rather than purely returning capital. A levered firm buying back stock while organic growth stalls is making a bet that integration turns the corner soon; if revenue stays soft and the integration costs persist, the combination of high leverage, thin coverage, and a one-time-aided earnings line is exactly what the bear case warns about.

Valuation

Lead with what the price is actually paying for, because CBIZ is a sum of service lines rather than one business. The decomposition points to the benefits-and-insurance segment as the part carrying the priced-in premium, and the assumption embedded there is modest: roughly 3.2% annual operating growth over the next several years, which is broadly within the range of what a steady professional-services line can deliver. This is not a demanding growth bet at the segment level. The demanding part of the story sits in the balance sheet and the integration, not in the growth the price requires.

The methods split in a way that reflects the integration drag. The asset-value and earnings-power lenses read the stock as expensive, because the recent reported returns, a return on equity near 6.6% and operating margins compressed by integration and technology costs, are depressed relative to the firm's normalized earning power. The relative-multiple and growth methods support the price, valuing the business on its revenue base and its longer-run growth rather than on a transitional year's margins. The honest read is that the cheap-versus-expensive verdict hinges entirely on whether the current depressed margins are temporary integration costs or a new normal, which is the central uncertainty of the Marcum deal.

Solvency is the decisive variable here and deserves the close. Net debt of about $1.5 billion sits at roughly 6 times trailing operating income, with interest coverage near 2.2 times and minimal liquid assets, which is real leverage for a services firm in the middle of a large integration. That coverage leaves little cushion if integration costs run longer than planned or if client attrition pulls revenue lower. The share count rising about 4% from the stock-funded portion of the deal means the buyback the firm is running is partly offsetting dilution, not purely shrinking the count. The buyer at today's price is underwriting a successful, on-schedule integration of a transformational acquisition on a balance sheet that does not have much room for it to go wrong, with the segment-level growth assumption itself the least of the concerns.

Catalysts

The first quarter was dominated by the Marcum integration. Revenue rose about 1.3% to $848.6 million, with organic growth near 1% as modest financial-services gains offset weaker benefits-and-insurance revenue. Reported net income jumped to $161.6 million, or $2.63 per diluted share from $1.91, but the increase was driven by a roughly $58 million one-time gain from acquisition-related adjustments, while underlying margins softened on integration, technology, and facility costs.

Management nonetheless lifted its profitability outlook, raising the full-year adjusted EBITDA target to $465 million to $475 million and adjusted EPS to $4.00 to $4.10, while reaffirming revenue of $2.8 billion to $2.9 billion and free cash flow of $270 million to $290 million. The forward watch items are whether organic growth reaccelerates as integration disruption fades, whether the firm retains Marcum's partners and clients, and how quickly it can bring leverage down from current levels. The continued buybacks, about $200 million across two programs early in the year, signal management's priorities, but the decisive catalyst is organic growth turning from roughly 1% back toward the firm's historical pace.

Peer Cohorts (Per Segment, With Filing Citations)

Financial Services (reported)

Benefits and Insurance Services (reported)

National Practices (reported)

Methodology Note

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

Q1 2026 earnings disclosures · Q1 2026 earnings release

View the full interactive CBZ report on boothcheck