Small and medium-sized businesses (“SMBs”) process enormous amounts of financial transactions daily. On top of this, these businesses must ensure regulatory compliance and manage employee benefits and payroll systems, all while keeping various areas of the business running smoothly.

While hiring full-time talent makes business sense, operations become increasingly complicated as firms grow, making it expensive to cover every aspect of the business with dedicated staff.

That’s where CBIZ (CBZ) comes in.

The company provides advisory, insurance, technology, and employee benefits management services to SMBs across the U.S., ranking among the biggest providers of accounting services and one of the largest brokers in the country.

CBIZ provides its services to companies in industries such as alternative investments, entertainment, capital markets, construction, consumer and industrial, energy, financial services, food and beverage, government, healthcare, education, private equity, and others. 

Since CBIZ handles a company’s regulatory compliance, switching vendors becomes costly and time-sensitive, resulting in high client retention rates of around 90%. The firm also cross-sells its offerings to its customer base, leading to higher billable hours and services.

The company generates revenue through a combination of project-based work and recurring services. Last year, it posted $2.8 billion in revenue, with recurring services contributing 72% and project-based work delivering the rest.

CBIZ’s growth strategy revolves around bolt-on acquisitions that enable it to push a wide array of services to its customer base spanning from tax and audit compliance to cybersecurity. Over the past few years, the company has added multiple firms to its portfolio. 

The most notable acquisition in recent years was the consulting and tax businesses of accounting services firm Marcum. The $2.3 billion deal made CBIZ one of the biggest accounting firms in the U.S. 

CBIZ’s acquisition strategy has translated to higher returns. Its Uniform return on assets (“ROA”) grew steadily from 19% in 2020 to 30% in 2025. It also achieved a 36% Uniform asset growth last year.

Despite being a strong performer, CBIZ trades at Uniform P/E of 13.5x, well below the 20x corporate average. This valuation also signals that investors are expecting the company’s returns to fall in the next few years.

We can see this through Valens’ Embedded Expectations Analysis (“EEA”) framework.

The EEA starts by looking at a company’s current stock price. From there, we can calculate what the market expects from the company’s future cash flows. We then compare that with our own cash-flow projections.

In other words, the EEA shows how well a company has to perform in the future to be worth what the market is paying for it today.

At current valuations, investors expect CBIZ’s returns to fall to 17% by 2030, well below the levels of returns it has achieved since 2020.