CoStar unveils $1.5 billion buyback and $3.78–$3.82 billion 2026 revenue target
CoStar Group approved a $1.5 billion share repurchase program and projected 2026 revenue of $3.78–$3.82 billion with record EBITDA of $740–$800 million. The company plans to slash Homes.com investments from $850 million to under $550 million by 2030 while targeting profitability that year, though shares dipped 2.7% on the announcement.
1. Apartments.com Reports December Rent Growth Reversal
CoStar Group’s Apartments.com platform recorded a national average rent of $1,708 in December 2025, a 0.1% increase from November’s upwardly revised $1,707. This marks the first monthly uptick after five consecutive months of flat or negative change. Annual growth moderated to 0.66% from 0.74% in November and down from 1.5% at the start of 2025. Regional data show the Midwest leading with a 0.12% month-over-month rise, the South up 0.07% and the Northeast up 0.06%, while the West edged down 0.01%. On an annual basis, the Midwest posted 2.2% growth, the Northeast 1.5%, the South saw a 0.1% decline and the West fell 1.4%. Major metros driving gains included San Francisco (+0.64%), Norfolk (+0.53%) and Richmond (+0.42%), while Portland (–0.29%) and a cluster of Mountain West and Sun Belt cities posted declines due to elevated vacancy from new supply and softening demand.
2. Regional Supply Pressures Shape Market Dynamics
CoStar’s analysis highlights that markets with the highest levels of new construction are seeing the weakest rent performance. Austin, Denver and San Antonio each recorded year-over-year declines exceeding 3%, reflecting oversupply outpacing demand. Conversely, supply-constrained metros such as Chicago and San Jose achieved 3.4% annual growth, and San Francisco led with 5.9%. Elevated inventory remains a drag on rent momentum, though December’s seasonal rebound suggests a gradual return to typical growth patterns in 2026.
3. $1.5 Billion Share Buyback and 2026 Financial Targets
CoStar Group announced a new $1.5 billion share repurchase program, signaling confidence in long-term cash flows. For fiscal 2026, the company targets revenue of $3.78 billion to $3.82 billion, an 18% increase year-over-year, and adjusted EBITDA of $740 million to $800 million, both records. Management plans to accelerate deployment of artificial intelligence across its brands and expects the buyback to support earnings per share growth as free cash flow expands.
4. Homes.com Investment Reduction and Profitability Path
As part of its capital allocation strategy, CoStar will scale back annual net investments in its Homes.com residential marketplace from $850 million in 2025 to under $550 million by 2030. The company reiterated its commitment to drive Homes.com to profitability by that year, reducing cash burn by at least $100 million annually. Analysts note that this realignment of resources toward higher-margin business lines could enhance overall return on invested capital.