Carlyle Group
CG
$48.88
-1.93%
The Carlyle Group Inc. is a global alternative asset management firm, operating across private equity, credit, and investment solutions, with $476.9 billion in total assets under management as of end-2025. As one of the world's largest alternative asset managers, Carlyle serves institutional investors and high-net-worth individuals through a diversified platform spanning global private equity, global credit, and Carlyle AlphInvest. The current investor narrative centers on the firm's strategic expansion into wealth management, highlighted by its multibillion-dollar acquisition of MAI, and its ability to generate performance fees amid volatile markets, while the stock has faced significant downward pressure over the past year, reflecting concerns about fundraising, deal flow, and the impact of interest rate movements on asset valuations.…
CG
Carlyle Group
$48.88
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Investment Opinion: Should I buy CG Today?
Rating: Hold. The consensus is a Buy with an average target of $55.59 (20.8% upside), but the recent fundamental deterioration warrants caution. The thesis is that CG is a cyclical asset manager with a strong franchise, but near-term earnings are depressed, and the stock's recovery depends on a rebound in performance fees and successful integration of MAI.
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CG 12-Month Price Forecast
The AI assessment is neutral with medium confidence. The stock is cheap on forward earnings, but the recent revenue collapse and negative cash flow create significant uncertainty. The key factor is whether the Q1 2026 revenue decline is a trough or a new trend. If revenue recovers in Q2, the stock could rally to the $55-60 range; if not, it could test the 52-week low. The stance would upgrade to bullish if revenue shows sequential growth and the forward P/E remains below 10x, or downgrade to bearish if revenue declines further or the dividend is cut.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Carlyle Group's 12-month outlook, with a consensus price target around $55.59 and implied upside of +13.7% versus the current price.
Average Target
$55.59
0 analysts
Implied Upside
+13.7%
vs. current price
Analyst Count
—
covering this stock
Price Range
$44 - $70
Analyst target range
Carlyle is covered by 17 analysts, with a consensus recommendation of 'buy' and a mean recommendation score of 2.24 (where 1 is strong buy and 5 is sell). The average price target is $55.59, implying an upside of approximately 20.8% from the current price of $46.02. The distribution shows a bullish tilt, with no sell ratings, but the presence of 'hold' ratings from firms like TD Cowen and JP Morgan suggests some caution. The target price range is $44.00 to $70.00, with the low end slightly below the current price, indicating that some analysts see downside risk, while the high end implies a 52% upside, reflecting optimism about a potential recovery in fundraising and deal activity.
Bulls vs Bears: CG Investment Factors
Carlyle presents a classic cyclical value trap versus recovery opportunity. The bull case rests on a cheap forward valuation (P/E 9.03), analyst consensus Buy with 20.8% upside, and strategic moves like the MAI acquisition to diversify revenue. The bear case is equally compelling: Q1 2026 revenue collapsed 76.5% YoY, net income swung to a -$132.2M loss, and the stock has badly lagged the market. The single most important tension is whether the Q1 2026 revenue collapse is a temporary trough or a new normal—if performance fees recover with market conditions, the stock could re-rate sharply; if not, the forward P/E is misleading. Currently, the bearish evidence from the latest quarter outweighs the bullish valuation metrics, but the analyst community's optimism and low forward multiple suggest a balanced risk/reward.
Bullish
- Analyst consensus Buy with 20.8% upside: 17 analysts rate CG a Buy (mean 2.24), with an average target of $55.59, implying ~20.8% upside from $46.02. No sell ratings, and the high target of $70 suggests 52% potential upside, reflecting optimism in a recovery.
- Forward P/E of 9.03 signals earnings rebound: Despite a trailing P/E of 26.27, the forward P/E of 9.03 indicates the market expects a sharp earnings recovery. Analysts estimate FY2026 EPS of $6.18, which would justify a higher price if realized.
- Strategic MAI acquisition expands wealth channel: Carlyle's multibillion-dollar acquisition of MAI (announced March 2026) positions it in high-net-worth wealth management, a growing distribution channel for alternative assets. This could diversify revenue and reduce reliance on institutional flows.
- Large AUM base of $476.9 billion provides fee stability: With $476.9B in total AUM and $336.8B in fee-earning AUM, Carlyle generates recurring management fees that partially offset volatile performance fees. This scale supports a stable revenue floor.
Bearish
- Revenue collapsed 76.5% YoY in Q1 2026: Q1 2026 revenue fell to $189.6M from $807.8M a year earlier, a -76.5% decline, driven by a collapse in performance fees and investment income. This extreme volatility highlights the cyclicality of earnings.
- Net loss of $132.2M in Q1 2026: The company swung to a net loss of -$132.2M in Q1 2026 from a profit of $130.0M in Q1 2025, reflecting negative operating leverage and mark-to-market losses. This raises concerns about near-term profitability.
- Stock underperformed S&P 500 by 42.3% over 1 year: CG fell 24.1% over the past year while the S&P 500 gained 18.2%, a relative underperformance of -42.3%. This persistent weakness suggests structural or cyclical headwinds beyond market volatility.
- High beta of 1.831 amplifies downside risk: With a beta of 1.831, CG is 83% more volatile than the market. In a downturn, the stock could fall significantly more than the broader market, as evidenced by its -41.57% max drawdown.
CG Technical Analysis
Carlyle's stock has been in a pronounced downtrend over the past year, with a 1-year price change of -24.13%, significantly underperforming the S&P 500's +18.19% gain. The current price of $46.02 sits at 66% of its 52-week range (low $39.60, high $69.85), indicating the stock is closer to its lows than highs, suggesting a bearish posture and potential value trap or opportunity depending on fundamentals. The stock's beta of 1.831 implies it is 83% more volatile than the market, amplifying both downside and upside moves, which is critical for risk management.
Beta
1.82
1.82x market volatility
Max Drawdown
-41.6%
Largest decline past year
52-Week Range
$40-$70
Price range past year
Annual Return
-22.3%
Cumulative gain past year
| Period | CG Return | S&P 500 |
|---|---|---|
| 1m | +11.1% | +2.8% |
| 3m | -3.5% | +4.2% |
| 6m | -16.7% | +11.3% |
| 1y | -22.3% | +21.5% |
| ytd | -19.7% | +12.7% |
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CG Fundamental Analysis
Carlyle's revenue trajectory has been highly volatile, with the most recent quarter (Q1 2026) reporting revenue of $189.6 million, a dramatic 76.5% year-over-year decline from $807.8 million in Q1 2025. This sharp drop reflects a collapse in performance fees and investment income, as the firm's earnings are heavily tied to market conditions and realizations. Over the trailing four quarters, revenue has swung from $1.18 billion in Q2 2025 to $1.84 billion in Q4 2025, then plummeted in Q1 2026, indicating extreme earnings variability and a lack of predictable growth. The company's net income in Q1 2026 was -$132.2 million, a stark reversal from the $130.0 million profit in Q1 2025, highlighting the cyclicality of its earnings.
Quarterly Revenue
$189600000.0B
2026-03
Revenue YoY Growth
-76.5%
YoY Comparison
Gross Margin
N/A
Latest Quarter
Free Cash Flow
$-917800000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CG Overvalued?
Given the negative net income in the most recent quarter, the trailing P/E ratio of 26.27 is based on the last four quarters' earnings, which were positive, but the forward P/E of 9.03 suggests the market expects a significant earnings recovery. The gap between trailing and forward P/E implies that analysts anticipate a sharp rebound in profitability, likely driven by improved realizations and fee income. The stock's P/S ratio of 4.34 is below the industry average for asset managers, which typically trade at 5-7 times sales, suggesting a potential discount. However, the negative PEG ratio of -1.25 indicates that earnings growth is expected to be negative in the near term, complicating the valuation picture.
PE
26.3x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 4x~33x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
23.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are substantial. The most immediate is the extreme revenue volatility: Q1 2026 revenue of $189.6M was down 76.5% YoY, and free cash flow over the trailing twelve months was -$917.8M, indicating cash burn. The company's debt-to-equity ratio of 2.41 is high, and with a net loss of -$132.2M in Q1, interest coverage is strained. Earnings are heavily dependent on performance fees, which are unpredictable and tied to market realizations, as seen in the swing from $1.84B revenue in Q4 2025 to $189.6M in Q1 2026. This cyclicality makes financial forecasting difficult and increases the risk of dividend cuts (payout ratio is 62.5% of earnings).
FAQ
The key risks are: (1) Financial risk: high debt-to-equity of 2.41 and negative free cash flow of -$917.8M TTM, which could lead to dividend cuts; (2) Market risk: beta of 1.831 means high sensitivity to market downturns, and the stock has already underperformed the S&P 500 by 42.3% over the past year; (3) Competitive risk: intense competition from larger asset managers like Blackstone and KKR; (4) Company-specific risk: integration of the MAI acquisition may fail to deliver expected growth. The most severe risk is a prolonged market downturn that keeps performance fees depressed.
The 12-month forecast is mixed. In the base case (50% probability), the stock could rise to $50-56, aligning with the analyst average target of $55.59. In the bull case (25% probability), it could reach $55-70 if performance fees recover strongly. In the bear case (25% probability), it could fall to $39-44, near the 52-week low. The most likely scenario is a gradual recovery, but the key assumption is that Q1 2026's revenue collapse is temporary. If revenue rebounds, the stock has significant upside; if not, it could test new lows.
On a forward basis, CG appears undervalued with a P/E of 9.03, but this is based on optimistic earnings estimates. The trailing P/E of 26.27 is elevated due to depressed earnings. The P/S ratio of 4.34 is below the industry average of 5-7x, suggesting a discount. However, the negative PEG ratio of -1.25 indicates expected earnings decline, which complicates the valuation. The market is pricing in a recovery, but the recent revenue collapse suggests the stock may be fairly valued or even overvalued if earnings don't rebound.
CG offers a compelling risk/reward if you believe in a recovery in private markets. The analyst consensus is Buy with a 20.8% upside to the average target of $55.59, and the forward P/E of 9.03 is attractive. However, the recent revenue collapse (-76.5% YoY) and negative cash flow (-$917.8M TTM) are major red flags. It could be a good buy for investors with a high risk tolerance and a 12-month horizon, but only if you are prepared for volatility (beta 1.831) and the possibility of further downside to the 52-week low of $39.60.
CG is more suitable for long-term investors with a high risk tolerance, given its high beta (1.831) and earnings volatility. The stock is not ideal for short-term trading due to unpredictable performance fees and market sensitivity. A minimum holding period of 3-5 years is recommended to ride out the cyclicality and benefit from a potential recovery in private markets. The dividend yield of 2.38% provides some income, but the payout ratio of 62.5% is a risk if earnings decline. Long-term investors should focus on the company's AUM growth and strategic expansion into wealth management.