Investors Should Buy Colliers International (CIGI) for Its Strong Growth Potential

Colliers International (CIGI) is a commercial real estate services provider with a favorable Growth Score and a Zacks Rank of #1 (Strong Buy). The company is expected to grow its EPS by 14.1% this year, beating the industry average of 2.8%. Its year-over-year cash flow growth is 8.7%, higher than the industry average of -1.8%. The company's annualized cash flow growth rate has been 19.1% over the past 3-5 years versus the industry average of 0.5%. Positive earnings estimate revisions further validate its growth prospects.

Colliers International Group (CIGI) has released its second quarter 2025 earnings report, showcasing robust financial performance despite global economic uncertainties. The company reported a 17% year-over-year increase in revenues, totaling $1.3 billion, and an adjusted EBITDA of $180 million, up 15% from the same period last year [1].

The engineering segment played a pivotal role in driving growth, with a 70% year-over-year increase in net revenue, supported by both internal growth and acquisitions. The real estate services segment saw a 4% increase in revenue, driven by strong performance in property management, valuation, and loan servicing. Capital markets revenue grew by 16%, with significant contributions from the US and Western Europe.

Colliers International's investment management division, rebranded as Harrison Street Asset Management, also contributed to the company's success. The division reported a 7% decline in net revenues due to the absence of catch-up fees recognized in the prior year, but it maintained a strong net margin of 42% [1].

The company's fundraising efforts have been successful, with $1.0 billion raised during the quarter and an additional $500 million raised since the end of the quarter. Year-to-date fundraising totals $2.7 billion, pacing towards the full-year target of $5 billion to $8 billion [1].

Colliers International completed several strategic acquisitions during the quarter, including the acquisition of Round Shield Partners, a European credit platform with $5.4 billion in AUM, and four tuck-under deals in engineering and two in real estate services. These acquisitions have enhanced the company's capabilities in credit, student housing, and hospitality, while also increasing its asset under management (AUM) to $111.03 billion [1].

The company's free cash flow conversion rate remained high at 98% of adjusted net earnings, consistent with its long-term target. The leverage ratio stood at 2.3x as of the quarter end, with expectations to decline below 2x by year-end following recent acquisitions [1].

Chairman and CEO Jay Hennick expressed optimism about the company's prospects, stating that the overall valuation of Colliers International Group is materially below where it should be. He emphasized the ongoing reviews of the investment management segment's structure but clarified that no final decision on a spin-off has been made [1].

The company's strong performance is further validated by its favorable Growth Score and Zacks Rank of #1 (Strong Buy). Analysts expect the company to grow its EPS by 14.1% this year, beating the industry average of 2.8%. The company's year-over-year cash flow growth is 8.7%, higher than the industry average of -1.8%, and its annualized cash flow growth rate has been 19.1% over the past 3-5 years versus the industry average of 0.5% [2].

In conclusion, Colliers International Group's second quarter 2025 earnings report demonstrates its resilience and growth potential in the face of global economic challenges. The company's diversified business model, strategic acquisitions, and robust fundraising efforts position it well for continued success.

References:
[1] https://www.fool.com/earnings/call-transcripts/2025/08/06/colliers-cigi-q2-2025-earnings-call-transcript/
[2] https://www.zacks.com/