Is CBZ a good stock to buy? We came across a bullish thesis on CBIZ, Inc. on Value Don’t Lie’s Substack. In this article, we will summarize the bulls’ thesis on CBZ. CBIZ, Inc.’s share was trading at $26.69 as of March 23rd. CBZ’s trailing and forward P/E were 14.77 and 16.53 respectively according to Yahoo Finance.
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CBIZ, Inc. provides financial, insurance, and advisory services in the United States and Canada. CBZ has seen its stock sharply rerated, with shares down 42% year-to-date and nearly 70% from 2025 highs, reflecting a transition from a premium EPS growth story trading at 20–30x earnings to a value stock at just 7–8x. The shift follows its transformative 2024 acquisition of Marcum LLP, which doubled revenue to roughly $2.8 billion but materially increased leverage and introduced dilution, altering the company’s long-standing playbook of steady, acquisition-driven expansion.
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Historically, CBIZ delivered consistent performance, with EPS compounding at 17% annually from 2016 to 2024, supported by over 120 acquisitions, stable share count, and leverage below 2x. The combined entity now operates across Financial Services (83% of revenue), Benefits & Insurance (15%), and National Practices (2%), with more than 75% recurring revenue, but near-term expectations have reset meaningfully.
Management’s 2026 guidance implies just 2–5% revenue growth and 4–7% EPS growth, as the company pauses acquisitions due to elevated leverage above 3x and instead pivots toward organic growth and share repurchases. This strategic shift, alongside concerns around potential AI disruption in lower-value service lines, has driven the multiple compression.
Despite this, the current setup presents a compelling value case. The stock trades near 6.5x free cash flow, implying a ~16% yield, and management has signaled willingness to prioritize buybacks even if it delays deleveraging targets. At current prices, aggressive repurchases could meaningfully boost EPS, potentially restoring double-digit growth. While downside exists if earnings compress further, the combination of strong cash flow, recurring revenue, and capital allocation flexibility creates an asymmetric risk/reward, where execution on buybacks and stabilization of fundamentals could drive a meaningful rerating.
Previously, we covered a bullish thesis on Paychex, Inc. by Serhio MaxDividends in May 2025, which highlighted the company’s strong recurring revenues, high margins, robust free cash flow generation, and consistent shareholder returns through dividends and buybacks. PAYX’s stock price has depreciated by approximately 37.25% since our coverage due to revenue misses, slower organic growth, and valuation compression in the payroll/HCM software sector. Value Don’t Lie shares a similar view but emphasizes on CBIZ, Inc.’s value-driven rerating potential supported by buybacks, deleveraging, and stabilizing growth.
CBIZ, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 27 hedge fund portfolios held CBZ at the end of the fourth quarter which was 24 in the previous quarter. While we acknowledge the risk and potential of CBZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CBZ and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
