Cushman & Wakefield (CWK)

Real estate services firm Cushman & Wakefield (NYSE:CWK) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 10.8% year on year to $2.91 billion. Its non-GAAP profit of $0.54 per share was in line with analysts’ consensus estimates.

Company Overview

With expertise in the commercial real estate sector, Cushman & Wakefield (NYSE:CWK) is a global Chicago-based real estate firm offering a comprehensive range of services to clients.

The Consumer Discretionary sector, by definition, is made up of companies selling non-essential goods and services. When economic conditions deteriorate or tastes shift, consumers can easily cut back or eliminate these purchases. For long-term investors with five-year holding periods, this creates a structural challenge: the sector is inherently hit-driven, with low switching costs and fickle customers. As a result, only a handful of companies can reliably grow demand and compound earnings over long periods, which is why our bar is high and High Quality ratings are rare.

Real estate services companies provide brokerage, property management, appraisal, and advisory services, earning transaction-based commissions and recurring management fees. Tailwinds include long-term housing demand driven by demographic growth, technology platforms that expand market access, and commercial real estate complexity that sustains advisory needs. Headwinds are pronounced: rising interest rates directly suppress transaction volumes by reducing housing affordability and commercial deal activity. Commission-rate compression, driven by discount brokerages and regulatory changes, erodes per-transaction revenue. The industry is highly cyclical, with revenue swings amplified by leverage. PropTech (property technology) disruptors threaten traditional intermediary models.

Cushman & Wakefield's (NYSE:CWK) primary competitors include CBRE (NYSE:CBRE), Jones Lang LaSalle (NYSE:JLL), Colliers International (NASDAQ:CIGI), and Savills (LSE:SVS).

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Cushman & Wakefield’s 5.6% annualized revenue growth over the last five years was weak. This fell short of our benchmark for the consumer discretionary sector and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Cushman & Wakefield’s recent performance shows its demand has slowed as its annualized revenue growth of 4.1% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

We can better understand the company’s revenue dynamics by analyzing its three most important segments: Management, Leasing, and Capital Markets, which are 32.5%, 22.7%, and 9.9% of revenue. Over the last two years, Cushman & Wakefield’s Management revenue (property management) averaged 4.2% year-on-year declines, but its Leasing (sourcing tenants) and Capital Markets (financial advisory) revenues averaged 2.8% and 12.4% growth.

This quarter, Cushman & Wakefield reported year-on-year revenue growth of 10.8%, and its $2.91 billion of revenue exceeded Wall Street’s estimates by 6.1%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds.

Cushman & Wakefield’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 4% over the last two years. This profitability was inadequate for a consumer discretionary business and caused by its suboptimal cost structure.

In Q4, Cushman & Wakefield generated an operating margin profit margin of 6.1%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Cushman & Wakefield’s EPS grew at a weak 8.5% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 5.6% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.

In Q4, Cushman & Wakefield reported adjusted EPS of $0.54, up from $0.48 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Cushman & Wakefield’s full-year EPS of $1.22 to grow 17.8%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Cushman & Wakefield has shown poor cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 2.4%, lousy for a consumer discretionary business.

Cushman & Wakefield’s free cash flow clocked in at $234.3 million in Q4, equivalent to a 8% margin. This result was good as its margin was 4.2 percentage points higher than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, causing temporary swings. Long-term trends are more important.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Cushman & Wakefield historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 8.4%, somewhat low compared to the best consumer discretionary companies that consistently pump out 25%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. On average, Cushman & Wakefield’s ROIC decreased by 1.8 percentage points annually each year over the last few years. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.

Cushman & Wakefield reported $784.2 million of cash and $3.00 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $656.2 million of EBITDA over the last 12 months, we view Cushman & Wakefield’s 3.4× net-debt-to-EBITDA ratio as safe. We also see its $216.2 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We enjoyed seeing Cushman & Wakefield beat analysts’ revenue expectations this quarter. Overall, this print had some key positives. The stock remained flat at $13.56 immediately after reporting.

Updated: February 19, 2026 at 7:23 AM EST

Before making an investment decision, investors should account for Cushman & Wakefield’s business fundamentals and valuation in addition to what happened in the latest quarter.

Cushman & Wakefield falls short of our quality standards. On top of that, Cushman & Wakefield’s weak EPS growth over the last five years shows it’s failed to produce meaningful profits for shareholders, and its relatively low ROIC suggests management has struggled to find compelling investment opportunities.

Cushman & Wakefield’s P/E ratio based on the next 12 months is 9.4x. While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $18.45 on the company (compared to the current share price of $13.56).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.