Back to top

Image: Bigstock

Bear of the Day: CaliberCos (CWD)

Read MoreHide Full Article

The market is rocketing to all-time highs nearly every day. That doesn’t mean this sugar high is going to last forever. We know what goes up must come down. One way to protect yourself when the tide turns is by sticking with stocks that have strong earnings trends and avoiding the ones with weaker trends.

Today’s Bear of the Day is a stock that has seen earnings estimates come down even as the stock has jumped higher. I’m talking about Zacks Rank #5 (Strong Sell) CaliberCos (CWD - Free Report) . CaliberCos might brand itself as the “Wealth Development Company.” This small-cap alternative asset manager, focused on real estate development and private equity-style strategies, has struggled to gain traction since its debut. The problem isn’t that Caliber doesn’t have projects in the pipeline, it’s that the public markets haven’t seen enough scale, earnings consistency, or visibility to justify putting serious money to work here.

Right now, the name carries a Zacks Rank #5 (Strong Sell) as earnings estimates have been drifting lower. Analysts have pulled back their forecasts, reflecting a tougher real estate environment marked by higher rates, tighter liquidity, and investor caution in commercial development. Combine that with Caliber’s relatively tiny size and limited operating history as a public company, and you’ve got a recipe for volatility without much upside conviction.

Over the last sixty days, analysts cut their numbers for the current quarter, next quarter and the current year. The bearish sentiment has pushed down our Zacks Consensus Estimates from a loss of $3.81 on the year to a loss of $9.17. The good news though, is that analysts are still forecasting a move to profitability next year with a 50-cent Zacks Consensus Estimate.

Revenue trends have been choppy and profitability remains elusive, which is a problem when institutional investors are looking for steadier alternative managers like Blackstone or Brookfield to park their capital. Until Caliber can show sustained earnings growth, scale its asset base, and prove it belongs in the big leagues of alternatives, this stock looks more like dead money than a hidden gem.

CaliberCos is in the Financial – Miscellaneous Services industry which ranks in the Top 22% of our Zacks Industry Rank. There are several names within this industry which are in the good graces of our Zacks Rank. These include Zacks Rank #1 (Strong Buy) Lazard (LAZ - Free Report) and Acadian Asset Management (AAMI - Free Report) .


 


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Lazard, Inc. (LAZ) - free report >>

CaliberCos Inc. (CWD) - free report >>

Acadian Asset Management Inc. (AAMI) - free report >>

Published in