Investment Thesis
CBRE exhibits deteriorating fundamentals with negative operating cash flow of -825M and declining net income (-9.4% YoY) despite modest revenue growth, signaling poor cash generation quality and weakening profitability. While strong interest coverage (22.5x) indicates no immediate solvency risk, the combination of negative FCF, thin margins (3.0%), and poor capital returns (ROE 3.7%, ROA 1.1%) presents an unfavorable risk-reward profile.
Strengths
- Strong interest coverage ratio (22.5x) indicates robust debt servicing capability
- Moderate leverage (Debt/Equity 0.59x) provides balance sheet flexibility
- Positive revenue growth of 1.6% YoY shows modest business momentum
Risks
- Negative operating cash flow (-825M) and free cash flow (-906M) indicate fundamental cash generation problems
- Net income declining 9.4% YoY while EPS grows 22.6% suggests unsustainable share buybacks masking deterioration
- Thin net margin (3.0%) and poor returns on equity (3.7%) and assets (1.1%) indicate weak capital efficiency
Key Metrics to Watch
- Operating cash flow inflection back to positive territory
- Net income recovery relative to revenue growth
- Return on equity improvement toward industry benchmarks
Financial Metrics
Revenue
10.5B
Net Income
318.0M
EPS (Diluted)
$1.07
Free Cash Flow
-906.0M
Total Assets
30.2B
Cash
1.7B
Profitability Ratios
Gross Margin
N/A
Operating Margin
4.9%
Net Margin
3.0%
ROE
3.7%
ROA
1.1%
FCF Margin
-8.6%
Balance Sheet & Liquidity
Current Ratio
1.08x
Quick Ratio
1.08x
Debt/Equity
0.59x
Debt/Assets
69.2%
Interest Coverage
22.49x
Long-term Debt
5.0B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-29T14:39:27.699451 |
Data as of: 2026-03-31 |
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