By Shaina Mishkin
Real estate data and technology company CoStar Group on Wednesday outlined its 2026 outlook and a plan for profitability for its home listings website.
The market's reaction implies that investors were hoping for more: CoStar stock was down 3% in late morning trading after falling as much as about 8% earlier in the day, according to Dow Jones Market Data.
Investors were focused on the plan for Homes.com, the listings portal that has been growing fast -- at a hefty price that shows up in its marketing spend. After CoStar launched Homes.com in earnest beginning with a Super Bowl ad in 2023, that spend increased to $1.36 billion in 2024 from $684 million in 2022, Barron's recently reported .
CoStar is "lowering the capital intensity of Homes.com," it said in a Wednesday release. The company will reduce its net investment, which it defines as revenue less directly attributable and allocated costs, by over $300 million in 2026 from $850 million in 2025. It will cut its net investment by at least $100 million every year until 2030, it said.
Homes.com will reach positive adjusted earnings before interest taxes depreciation and amortization, or Ebitda, in 2030, CoStar said. It expects the listings site will "deliver revenue in excess of expenses exiting 2029, supported by subscriber acquisition, in-depth advertising, builder partnerships, the company's Boost program, and continued reduction in expenses," it said.
That timeline "is longer than most investors had expected," BMO Capital Markets analyst Jeffrey Silber wrote in a Wednesday note, "though the 2026 spend is likely lower than most had forecast."
The company's targets for Homes.com "appear generally in line with the range of expectations we've heard from investors," KBW analyst Ryan Tomasello wrote in a Wednesday note. But its earnings guidance could leave investors something to be desired, he added.
"Despite the implied $200mn+ cost reduction for Homes.com in 2026, the 2026 Ebitda guidance is in line with consensus (which we do not think was incorporating meaningful cuts), which could come as disappointment," Tomasello wrote.
CoStar foresees "significant expansion" of adjusted Ebitda in 2026. It expects adjusted earnings in a range of $740 million to $800 million, which represents a 20% margin at its midpoint and an 83% increase compared to the midpoint of previous 2025 guidance, CoStar said.
It expects 2026 revenue in a range of $3.78 billion to $3.82 billion, up 18% from prior 2025 guidance, and an approximate 15% compound annual growth rate for its revenue from 2025 to 2028. It also said it authorized a new $1.5 billion share repurchase program.
The outlook was the result of a review by CoStar's capital allocation committee, the company wrote. That committee was announced, along with several board changes, in 2025 as part of a support agreement with DE Shaw and Third Point.
Third Point CEO Daniel Loeb previously wrote in a letter to investors that the company could expand its Ebitda by by more than seven times over several years by narrowing losses at Homes.com and growing its legacy businesses, Barron's previously reported.
( News Corp, which owns Barron's, also operates Realtor.com, a residential real estate listings portal.)
Write to Shaina Mishkin at shaina.mishkin@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 07, 2026 12:36 ET (17:36 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments