3 Reasons to Avoid CBRE and 1 Stock to Buy Instead

Weixin Lin Thu, July 9, 2026 at 8:53 AM EDT 3 min read **

• CBRE
• ^GSPC

3 Reasons to Avoid CBRE and 1 Stock to Buy Instead Over the past six months, CBRE's shares (currently trading at $139.98) have posted a disappointing 15.4% loss, well below the S&P 500's 7.7% gain. This might have investors contemplating their next move.

Is now the time to buy CBRE, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it's free.

Why Do We Think CBRE Will Underperform?

Even though the stock has become cheaper, we're sitting this one out for now. Here are three reasons why there are better opportunities than CBRE, plus one stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

A company's long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, CBRE grew its sales at a 12% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.

CBRE Quarterly Revenue

2. Mediocre Free Cash Flow Margin Limits Reinvestment Potential

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

CBRE has shown poor cash profitability relative to peers over the last two years, giving the company fewer opportunities to return capital to shareholders. Its free cash flow margin averaged 2.9%, below what we'd expect for a consumer discretionary business.

CBRE Trailing 12-Month Free Cash Flow Margin

3. New Investments Fail to Bear Fruit as ROIC Declines

ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

On average, CBRE's ROIC decreased by 2.2 percentage points annually each year over the last few years. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.

CBRE Trailing 12-Month Return On Invested Capital

Final Judgment

CBRE doesn't pass our quality test. After the recent drawdown, the stock trades at 18.8× forward P/E (or $139.98 per share). This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now. We'd suggest looking at a safe-and-steady industrials business benefiting from an upgrade cycle.

Stocks We Would Buy Instead of CBRE

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