Colliers' significant reliance on acquisition-driven growth, combined with increased amortization expenses and foreign exchange volatility, presents a risk to consistent profitability and margin stability
Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 23 Apr, 25 | CIGI | Buy | USD 113.11 | USD 118.5 | USD 122.0 | 1 day | 7.9% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Colliers International Group Inc. provides commercial real estate to corporate and institutional clients in the United States, Canada, Europe, Australia, the United Kingdom, Poland, China, India, and internationally. It operates through three segments: Real Estate Services, Engineering, and Investment Management. The company offers capital markets services for property sales, debt finance, mortgage investment banking, and landlord and tenant representation services; and outsourcing services, such as building operations and maintenance, facilities management, lease administration, property accounting and financial reporting, contract and construction management, valuation and appraisal review and management, portfolio or single asset valuation, financial reporting advisory, arbitration consulting, research, highest and best use studies, property tax reviews, appeals and litigation support, and occupier services, as well as loan servicing. It also engages in the planning, designing, and project management of assets, including bridges and structure, highway and traffic engineering, construction engineering and inspection, water, traffic planning, and rail; and provision of air quality assessments, brownfield redevelopment, environmental impact assessments, ground water resource development, site remediation, noise studies, land development and monitoring, and other services, as well as water, storm, and wastewater management services. In addition, the company offers project management services, which include bid document review, construction monitoring and delivery management, contract administration and integrated cost control, development management, facility and engineering functionality, milestone and performance monitoring, quality assurance, risk management, and strategic project consulting; and perpetual funds, long-dated funds, and separately managed accounts. Colliers International Group Inc. was founded in 1972 and is headquartered in Toronto, Canada.
GAAP diluted EPS growth: Full-year GAAP diluted EPS more than doubled, increasing by 128% from $1.41 to $3.22, indicating strong profitability enhancement
Engineering revenue growth: Engineering revenues surged by 61% year-over-year in Q4, from $262.5 million to $421.4 million, driven by acquisitions and internal demand
Engineering segment margin pressure: Though Engineering revenue rose significantly, GAAP operating earnings declined by 33%, from $11.9 million to $8.0 million in Q4, primarily due to amortization from acquisitions
Decline in GAAP operating earnings (Q4): Despite top-line growth, GAAP operating earnings fell by 8.5% in Q4, from $132.6 million to $121.4 million
Colliers' significant reliance on acquisition-driven growth, combined with increased amortization expenses and foreign exchange volatility, presents a risk to consistent profitability and margin stability
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 113.11 | 100.0 | 118.5 | 122.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strong Fourth Quarter Performance
In the fourth quarter of 2024, Colliers reported consolidated revenues of $1.50 billion, reflecting a 22% increase in both US dollars and local currency compared to the prior year. Adjusted EBITDA for the quarter rose 14% (15% in local currency) to $225.3 million. Adjusted earnings per share (EPS) increased 13% to $2.26 from $2.00 in the same quarter last year, and would have been $0.02 higher without foreign exchange headwinds. GAAP diluted net earnings per share rose 4% to $1.47, despite a decline in GAAP operating earnings to $121.4 million from $132.6 million in the prior year period.
Full Year Financial Highlights
For the full year, Colliers generated revenues of $4.82 billion, up 11% in both US dollars and local currency. Adjusted EBITDA reached $644.2 million, an 8% increase (9% in local currency), while adjusted EPS improved to $5.75 from $5.35 in the prior year. Foreign exchange impacts slightly reduced EPS by $0.03. GAAP operating earnings climbed to $389.2 million from $300.9 million, aided by top-line growth and the reversal of contingent consideration from a past acquisition. GAAP diluted EPS surged to $3.22 from $1.41 in 2023, showing strong bottom-line expansion.
Segmental Performance Overview
Real Estate Services contributed $943.5 million in Q4 revenues, up 12% (13% in local currency), driven by strong performances in Capital Markets and Leasing. Engineering posted the most significant growth with revenues of $421.4 million, marking a 61% increase due to acquisitions and higher internal demand. Investment Management recorded modest growth with Q4 revenues of $136.6 million, a 6% increase including performance fees, while excluding those fees, revenue was up 1%. Across all segments, Engineering showed the highest revenue growth at 25% for the full year.
Adjusted EBITDA and Operating Results by Segment
In Q4, Adjusted EBITDA rose across segments: Real Estate Services grew 12% to $136.2 million, Engineering rose 51% to $38.1 million, and Investment Management increased 1% to $54.4 million. However, GAAP operating earnings for Engineering and Investment Management declined due to higher amortization expenses and other cost factors. For the full year, Investment Management delivered stable Adjusted EBITDA of $213.7 million, while Engineering and Real Estate Services recorded respective growth of 14% and 14%.
Recurring Revenues and Business Evolution
Chairman and CEO Jay S. Hennick highlighted the company’s strategic transformation, noting that 70% of Colliers' earnings now stem from recurring revenue sources. The firm’s growth strategy is anchored in three high-value segments—Real Estate Services, Engineering, and Investment Management—backed by a strong global workforce of 23,000 professionals and nearly $100 billion in assets under management.
Growth Outlook for 2025
Looking ahead to 2025, Colliers expects continued top-line and bottom-line expansion. The company projects high single-digit to low-teens revenue growth, with low-teens growth in Adjusted EBITDA and Adjusted EPS. These projections incorporate current foreign exchange conditions and reflect internal momentum and contributions from recent acquisitions. Recovery in Capital Markets, enhanced institutional allocations in Investment Management, and a growing contractual backlog in Engineering are expected to be key drivers.
Corporate Costs and Strategic Investments
While the company saw higher unallocated global corporate costs, rising from $2.4 million to $3.4 million in Q4 and from $7.4 million to $12.8 million for the year, these increases were tied to performance-based incentives and insurance reserves. The higher GAAP corporate operating losses reflect strategic investments aimed at positioning Colliers for sustained long-term growth and competitiveness
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given to Colliers International Group Inc. (NASDAQ: CIGI) at the closing market price of USD 113.11, as on April 22, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Real Estate Industry: Real Estate Services
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| CIGI Colliers International Group Inc Bats |
-1.88 1.50% | 123.71 | 44.18 | 19.92 | 1.30 | 4.80 | 1.71 | 13.63 |
| MSGNF Man Sang International Limited |
- -% | 0.21 | - | - | 844.75 | 3.95 | 3.76 | -1.3608 |
| CBRE CBRE Group Inc Class A |
-4.065 3.17% | 124.25 | 44.43 | 25.91 | 1.22 | 4.85 | 1.40 | 24.55 |
| CSGP CoStar Group Inc |
-0.88 1.15% | 75.49 | 115.64 | 227.27 | 15.03 | 5.03 | 13.36 | 84.12 |
| CLNXF Cellnex Telecom S.A |
- -% | 38.15 | - | 208.33 | 6.31 | 1.67 | 10.46 | 15.58 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 22,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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