The Private Equity Accounting Bet Is Starting to Look Shaky
CBIZ's stock is down 50% over the past year.
The market is sending a signal. And if you've been watching private equity’s push into accounting, you should pay attention to it.
CBIZ is the only publicly traded accounting firm in the U.S. That makes it a rare window into how investors value the accounting business model.
When CBIZ acquired Marcum at the end of 2024, the stock was at $78. It climbed to $90 in early 2025, right around the peak of PE deal velocity in the profession.
By the end of March, it had fallen to just under $27. It's recovered somewhat, sitting around $35 as of this writing. But that's still less than half of what it was at the top.
To make matters worse, CBIZ anticipates just 2% to 5% revenue growth for 2026.
Factor in inflation, and that's basically flat.
When David Leary and I broke down these figures on Episode 490 of The Accounting Podcast, we reached the exact same conclusion: the traditional private equity consolidation playbook is running out of runway.
What Is the Market Saying?
Gary Shamis, CEO of Winding River Consulting, wrote a piece in Accounting Today framing this as the market pricing in execution risk, including integration challenges from the Marcum deal, investor concerns about leverage, and limited organic growth.
He's right about all of that. But investors are starting to register a deeper problem that no amount of better integration can fix.
The PE playbook for accounting goes like this: consolidate firms, create scale, squeeze out inefficiencies, and flip it to the next buyer.
It makes sense if the underlying business model holds up. But AI puts pressure on that model.
Billing for hours and running a headcount-heavy pyramid structure made sense when scale required bodies. That assumption is breaking down fast.
The Competitive Threat
Mid-size firms like CBIZ aren’t doing Fortune 500 audit work. That's still the Big Four's territory. So they can't go up-market.
But they can absolutely lose work to smaller, faster firms.
AI is breaking the link between headcount and capability.
A 10-person firm using AI can handle work that once required a team of 100. And I’ve written before about solo firms that do serious volume with almost no staff.
Mid-size firms sell clients on the breadth of their services and on having specialists in every area.
But small firms can now access deep expertise across disciplines through AI. That competitive advantage is shrinking fast.
Suddenly, thousands of smaller, leaner competitors can go after work that used to flow only to the CBIZes of the world.
That's a big wave of new competition hitting exactly the market segment where mid-size consolidators live.
The Billing Model Problem
There's another wrinkle.
Even if a mid-size firm rolls out AI successfully and its people become dramatically more productive, how do they capture that value under a billable-hour model?
They don't. They get paid less.
If it takes half as long to do the work and you're billing by the hour, your revenue drops by half. The only way to benefit from AI productivity is to switch to fixed-fee or value-based pricing. That's a fundamental change to how a legacy firm prices and sells its services.
Large, PE-backed firms with investors expecting predictable quarterly returns are poorly positioned to make that transition.
Private equity is good at finding operational efficiencies within an existing model. It's not designed to reinvent the model from scratch.
What Happens Next
Massive firm size won’t be the winning hand over the next decade.
The future belongs to smaller firms that can move first on pricing, rethink their staffing, and use AI to do more with fewer people rather than just layering it on top of an unchanged operation.
Small and mid-size firms willing to pivot have a real shot at taking clients and talent from the large regional players.
That's a risk investors in PE-backed accounting firms are just starting to think through.
CBIZ's stock decline is the first visible data point. It won't be the last.
To hear more of our analysis, check out Episode 490 of The Accounting Podcast.
