Carlyle Group (CG): A Fresh Look at Valuation After Recent Share Price Pullback

Carlyle Group (CG) shares have seen a bit of turbulence lately, with the stock giving back around 11% over the past month. Despite the choppiness, long-term investors may be curious about what is behind the softer momentum.

See our latest analysis for Carlyle Group.

While Carlyle Group’s share price has lost ground over the past month, it is worth noting that the trend has been fading for a while with a 1-year total shareholder return just below zero. Despite short-term softness, longer-term returns remain robust, signaling that investor sentiment may be resetting after an extended run-up rather than declining for fundamental reasons.

If recent shifts in CG’s momentum have you curious about what else is performing, this could be the perfect time to broaden your search and discover fast growing stocks with high insider ownership.

With earnings and growth still on an upward trajectory, yet shares off their highs and trading at a discount to analyst targets, the key question is whether Carlyle Group is a bargain or if the market already factors in future gains.

Most Popular Narrative: 21.1% Undervalued

Carlyle Group's most popular narrative calls for a fair value of $65.56, notably above the last close price of $51.72. The setup hints at a company with strong underlying drivers and a valuation story that stands out in the sector.

*Ongoing technological innovation and digital transformation across industries are fueling strong investment activity and deal flow, as evidenced by deployment growth (up nearly 50% YoY) and high appreciation in recent buyout funds. This is likely to support robust realization activity and performance-related fee growth, driving upside to earnings and cashflows.*

Read the complete narrative.

Curious how technology trends, market expansion, and bold earnings assumptions weave together into a high-conviction valuation? Some of the key financial levers behind this price target may surprise long-term investors. Want to see all the upside scenarios that underpin this narrative? Dive in to uncover what analysts expect will fuel the next leg higher.

Result: Fair Value of $65.56 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing regulatory changes or intensifying competition could dampen Carlyle’s earnings outlook and threaten the narrative of continued robust future growth.

Find out about the key risks to this Carlyle Group narrative.

Another View: What Does the Market Multiple Say?

While analysts’ projections point to upside, the current market is pricing Carlyle Group at a price-to-earnings ratio of 28.2 times, significantly higher than both the industry average of 23.4 times and the peer average of 15.2 times. The fair ratio, based on our regression analysis, sits at 18.3 times. This premium suggests the market is banking on above-average growth or resilience, which leaves little margin for disappointment if results underwhelm. Is there enough in Carlyle’s future to justify staying at the top end of this range?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Carlyle Group Narrative

If you have a different perspective or want to see what your own research reveals, you can easily build your own viewpoint in just a few minutes. Do it your way.

A great starting point for your Carlyle Group research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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