CoStar's (CSGP) bookings for Q1 are expected to miss expectations with a sharp 40% year-over-year decline driven by negative performance at Homes.com, RBC Capital Markets said in an earnings preview on Thursday.
The investment firm said that the recent formation of a capital allocation committee suggests renewed focus on profitability or even strategic alternatives for Homes.com, which experienced a continued year-over-year drop in both total and unique visits.
RBC expects CoStar to guide Q2 revenue in the range of $785 million to $795 million and raise its full-year outlook to between $3.14 billion and $3.17 billion. Analysts polled by FactSet expect $739.2 million and $3 billion, respectively.
CoStar plans to invest about $900 million in fiscal 2025 to build a dedicated Homes.com salesforce of over 500 people and it will decrease marketing spend year-over-year as it prioritizes salesforce investments, the firm said.
RBC has a sector perform rating on the company's stock with a $83 price target.
Shares were 1.1% higher in recent trading.
Price: 79.85, Change: +0.83, Percent Change: +1.05
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