CBRE GROUP INC - A (NYSE:CBRE): A Prime Affordable Growth Stock in Commercial Real Estate

Investors looking for growth opportunities at fair prices often consider the "Affordable Growth" strategy, which focuses on companies with promising growth, steady profitability, and strong financials, all without paying too much for stocks. This method combines the search for high-growth firms with careful valuation, lowering the chance of overpaying for future earnings. One stock that meets these standards is CBRE GROUP INC - A (NYSE:CBRE), a top player in global commercial real estate services.

Growth: A Major Factor

CBRE’s growth numbers are impressive, with a Growth Rating of 7 in the fundamental analysis report. The company has shown notable revenue growth, with a 14.96% year-over-year rise, and an 8.40% average annual revenue growth rate over recent years. Earnings per share (EPS) jumped 50.95% in the past year, and while long-term EPS growth has been slower at 6.61%, analysts expect it to climb to 16.71% annual EPS growth in the future. This upward trend points to better efficiency and rising demand for CBRE’s varied real estate services.

For the Affordable Growth strategy, solid growth is vital because it shows a company can increase earnings without depending only on higher market valuations—a common risk in growth investing.

Valuation: Fair for the Growth Potential

Despite its growth, CBRE’s Valuation Rating of 5 suggests it is not overvalued compared to peers. The stock trades at a P/E ratio of 28.09, slightly above the S&P 500 average (27.03) but well below the industry average of 36.78. Its forward P/E of 21.71 is notably lower than both the sector (42.58) and the broader market (36.28). CBRE’s Enterprise Value/EBITDA and Price/Free Cash Flow ratios are also more appealing than many competitors, supporting its fair valuation.

This mix of growth and valuation is key for the Affordable Growth approach—investors avoid paying too much while still benefiting from earnings growth.

Profitability and Financial Health: Backing the Growth

While growth and valuation are important, profitability and financial health ensure long-term success. CBRE’s Profitability Rating of 6 reflects good returns, including a 13.21% Return on Equity (ROE)—beating nearly 97% of industry peers—and a 3.94% Return on Assets (ROA), better than 89% of competitors. However, margins have dipped slightly in recent years, which is worth watching.

The Financial Health Rating of 5 is balanced, with both strengths and weaknesses. CBRE’s Altman-Z score of 3.54 indicates low bankruptcy risk, and its debt-to-equity ratio (0.88) is manageable, though its debt-to-free-cash-flow ratio (6.64) is somewhat high. Share buybacks have cut outstanding shares, a positive sign for shareholders.

Why This Matches the Affordable Growth Strategy

The Affordable Growth screen favors stocks like CBRE because they provide:

• Strong growth (rising revenue and earnings).
• Fair valuation (priced below industry peers).
• Good profitability and financial health (supporting sustainable growth).

For investors, this mix lowers risk while keeping room for gains.

For more details on CBRE’s fundamentals, see the full fundamental analysis report here.

Finding More Affordable Growth Options

CBRE is just one example of a stock that fits the Affordable Growth criteria. Investors searching for similar opportunities can check other screened results using the Affordable Growth Stock Screener.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own research or consult a financial advisor before making decisions.