CG
CGThe Carlyle Group is a global investment firm specializing in private equity, credit, and real estate within the investment advice industry.
It is a leading alternative asset manager known for its extensive global network and focus on corporate partnerships.
Updated: January 14, 2026, 16:00 EST
Investment Opinion: Should I buy CG Today?
Based on a comprehensive analysis of Carlyle Group Inc. (CG), the stock presents a high-risk, speculative profile that is difficult to recommend for most investors.
Technical Analysis & Risk The stock is exhibiting strong bullish momentum, significantly outperforming the market and trading near its 52-week high. However, its high beta and substantial historical drawdown highlight extreme volatility, making it susceptible to sharp reversals. Elevated short interest adds another layer of near-term volatility risk.
Fundamentals & Valuation The fundamental picture is deeply concerning. Recent quarterly results show a severe collapse in profitability and negative cash flows, exacerbated by a weak balance sheet with high debt and poor interest coverage. Valuation metrics are alarming, with a catastrophic forward P/E and negative growth, indicating the stock is substantially overvalued based on its current financial health.
Recommendation While the technical momentum is compelling, it is entirely disconnected from the deteriorating fundamentals and extreme overvaluation. The combination of poor profitability, weak financial health, and sky-high valuation multiples creates significant downside risk. For these reasons, CG is not worth buying at this time. Investors should wait for a material improvement in the company's core financial metrics before considering a position.
CG 12-Month Price Forecast
RockFlow Model Forecast: Three Scenarios for 2026
Of course. Here is a 12-month outlook for The Carlyle Group (CG) based on the provided analysis.
12-Month Outlook for CG:
The outlook for CG appears highly speculative and bifurcated between strong technical momentum and deteriorating fundamentals. Key catalysts would be a sustained recovery in global private equity dealmaking and successful exits from its investment portfolio, which could restore investor confidence. However, significant risks dominate, including its high volatility (beta), weak balance sheet with high debt, and alarming declines in profitability and cash flow. Given the extreme overvaluation and negative growth outlook, the stock faces substantial downside risk, with technical support levels likely to be tested if fundamentals do not improve promptly. In the absence of a clear analyst target, the current price near 52-week highs seems unsustainable.
Wall Street Consensus
Most Wall Street analysts are optimistic about CG's 12-month outlook, with consensus target around $65.56, indicating expected upside potential.
Bulls vs Bears: CG Investment Factors
Overall, CG has investment potential but also faces challenges. Here are key factors to weigh before investing.
Bullish
- UBS Raises Price Target: Price target increased to $81 with a maintained Buy rating.
- Strong Investment Activity: 26North's $700M equity investment in NEP Group highlights growth.
- No Credit Deterioration Seen: CEO notes credit volatility but no signs of fundamental issues.
Bearish
- Weak Q3 Earnings: Shares fell 5.7% following disappointing third-quarter financial results.
- Credit Market Volatility: CEO flags ongoing turbulence in credit markets as a concern.
- Investor Disappointment: Recent performance led to significant selling pressure and negative sentiment.
CG Technical Analysis
CG has demonstrated exceptionally strong bullish momentum over the past year, significantly outperforming the market despite its high volatility.
The stock's impressive short-term gains of 8.82% over one month and 10.81% over three months comfortably exceed the broader market's performance, as indicated by its 7.44% relative strength, confirming its status as a clear outperformer guided by its high beta of 2.038. This substantial momentum suggests strong investor confidence and upward pressure.
Currently trading near its 52-week high of $69.85, the stock appears overbought after more than doubling from its low, although its significant historical maximum drawdown of -38.94% serves as a cautionary reminder of its inherent volatility and potential for sharp reversals.
| Period | CG Return | S&P 500 |
|---|---|---|
| 1m | +12.4% | +1.3% |
| 3m | +16.8% | +5.7% |
| 6m | +15.3% | +10.6% |
| 1y | +21.6% | +16.5% |
| ytd | +7.7% | +1.1% |
CG Fundamental Analysis
Revenue & Profitability: CG's Q3 2025 performance shows a significant contraction, with revenue falling to $780.5 million from $1.18 billion in Q2. While the gross profit margin remains strong at 73.5%, profitability collapsed as the net income margin plummeted to just 0.12% from 27.2% the prior quarter, driven by a substantial increase in operating and other expenses.
Financial Health: The company's financial health is a concern, with a high debt-to-equity ratio of 2.25 and an interest coverage ratio of just 0.41, indicating weak ability to service its debt. Furthermore, cash flow metrics are deeply negative, with a cash flow to debt ratio of -0.21 and negative operating and free cash flow per share, signaling potential liquidity stress.
Operational Efficiency: Operational efficiency has deteriorated markedly, with return on equity (ROE) collapsing to near zero at 0.016% and a very low asset turnover of 0.029. This indicates extremely poor utilization of both shareholder equity and company assets to generate earnings or sales in the most recent quarter.
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
RockFlow Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
Try Now & Get Tesla Stock RewardValuation Analysis: Is CG Overvalued?
Valuation Level Analysis
CG's trailing PE of 19.52 appears reasonable at face value, but it is overshadowed by an astronomically high forward PE of over 6,271, indicating the market expects a severe collapse in earnings. Furthermore, a negative PEG ratio of -62.9 signals that earnings growth is deeply negative, while an extremely high EV/EBITDA of 238 suggests the company's operating cash flow is minimal relative to its total enterprise value. The elevated PB of 3.47 and PS of 4.3 confirm that the stock is trading at a significant premium to its book value and sales, pointing to substantial overvaluation based on its own fundamentals.
Peer Comparison
Without specific industry averages provided, a direct quantitative comparison is not possible. However, a trailing PE near 20 is often close to broad market averages, but the catastrophic forward earnings projection and negative growth metrics are severe outliers that would almost certainly place CG as significantly overvalued relative to any typical industry peer group. The combination of negative growth and sky-high valuation multiples relative to cash flow suggests the company is in a fundamentally weaker position than most competitors.
Investment Risk Disclosure
Based on the metrics provided, CG exhibits significant volatility risk with a Beta of 2.038, indicating it is approximately twice as volatile as the broader market. This high sensitivity to market movements is corroborated by its substantial one-year maximum drawdown of -38.94%, underscoring a history of severe price declines during recent downturns. Consequently, the stock is suited only for investors with a high-risk tolerance.
Regarding other risks, the notably high short interest suggests a considerable number of investors are betting on the stock's price declining, highlighting negative market sentiment or concerns about the company's fundamentals. While there appears to be adequate liquidity for standard trading volumes, this elevated short interest itself poses a risk of a short squeeze if positive news triggers a rapid price increase, leading to heightened near-term volatility.
FAQs
Bearish. CG appears overvalued and faces significant fundamental headwinds, despite recent strong momentum. Key concerns include a severe deterioration in profitability and cash flow, an unsustainable valuation with a catastrophic forward P/E, and weak financial health indicated by a high debt load. This stock is suitable only for highly risk-tolerant, speculative traders who can stomach its extreme volatility and potential for sharp reversals.
Based on the metrics and fundamentals, CG stock is severely overvalued. Despite a seemingly reasonable trailing P/E of 19.52, it is dramatically overvalued on forward-looking metrics like its astronomical forward P/E of 6,271 and negative PEG ratio (-62.9), which indicate catastrophic earnings expectations. Furthermore, its P/B of 3.47 and P/S of 4.3 are high, especially when contextualized by its collapsing profitability (0.12% net margin), negative cash flows, and poor operational efficiency. These fundamentals do not support its current valuation multiples, suggesting it is priced for unrealistic optimism or is ignoring severe underlying weaknesses.
Of course. As a risk management analyst, here is an objective assessment of the key risks of holding CG stock, based on the information provided.
Key Risks of Holding CG Stock
Based on the provided data, the primary risks are ranked by severity and potential impact on the investment.
1. Severe Financial Health and Liquidity Risk The company's ability to meet its financial obligations is critically impaired, evidenced by a dangerously low interest coverage ratio of 0.41, indicating earnings are insufficient to cover interest expenses, and negative operating cash flow, which signals potential liquidity stress.
2. Extremely High Volatility and Price Decline Risk The stock's Beta of 2.038 means it is approximately twice as volatile as the market, a characteristic confirmed by a severe maximum drawdown of -38.94%, indicating a history of sharp price declines that can lead to significant capital loss.
3. Fundamental Business Deterioration Risk Recent operational performance has collapsed, with net income margin plummeting to 0.12% and Return on Equity (ROE) falling to near zero (0.016%), indicating a severe failure to generate profits from revenue and shareholder equity.
4. Negative Market Sentiment and Technical Overextension Risk A notably high short interest reflects a strong contingent of investors betting on the stock's decline, while the stock's price trading near its 52-week high after a major rally creates vulnerability to a sharp correction if sentiment shifts.
Of course. Here is a forecast for The Carlyle Group (CG) stock performance through 2026.
CG Stock Forecast through 2026
Based on a mixed outlook of strong bullish momentum against weak fundamentals, the forecast for CG is highly speculative. A base case target range for late 2026 is $40-$55, predicated on the current technical rally faltering as fundamental weaknesses (high debt, collapsing profitability) reassert themselves. A bull case scenario of $75-$90 would require a significant reversal in private equity dealmaking, successful exits from its investment portfolio at high valuations, and a rapid improvement in its balance sheet.
Key growth drivers through 2026 would be: 1) A sustained recovery in the global private equity environment, boosting fee-related earnings, 2) Successful monetization of its portfolio companies in a favorable IPO/M&A market, driving realized performance revenue, and 3) Effective cost management to restore profitability.
The primary assumptions are that macroeconomic conditions (interest rates, GDP growth) will stabilize and that the company can navigate its current financial stress without a major crisis. This forecast carries high uncertainty; the stock's high volatility, lack of analyst consensus, and dependence on unpredictable capital markets make its path to 2026 exceptionally difficult to predict with confidence.