Education
About Us
Working with TipRanks
Follow Us
CoStar Group (CSGP)
NASDAQ:CSGP
Top Page
CoStar Group
(NASDAQ:CSGP)
78Outperform
Positive Factors
Market Differentiation
CSGP's Matterport acquisition boosts its digital marketplace differentiation with AI-powered 3D digital twins enhancing property engagement.
Revenue Growth
CoStar Group's hiring efforts are expected to bolster revenue growth in its core businesses, positioning the company for stronger growth in the future.
Strategic Acquisition
The acquisition of Matterport is seen as strategically sensible for CoStar Group due to its potential to enhance user experience across real estate marketplaces using 3D digital twin capabilities.
Negative Factors
Investment Concerns
Uncertainty around signs of an improvement in Homes.com keeps the stock Underweight given the heavy investment still in place.
Residential Segment Impact
The Residential segment of CoStar Group is currently perceived as having a punitive effect on the share price.
Uncertainty in Revenue Allocation
There is uncertainty about where CoStar Group will allocate Matterport's revenue, impacting the clarity of financial projections.
CoStar Group (CSGP) vs. S&P 500 (SPY)
Market Cap
$33.45B
Dividend YieldN/A
Average Volume (3M)4.03M
Price to Earnings (P/E)233.3
Beta (1Y)1.13
Revenue Growth11.45%
EPS Growth-63.09%
CountryUS
Employees6,593
SectorReal Estate
Sector Strength69
IndustryReal Estate - Services
Share Statistics
EPS (TTM)0.34
Shares Outstanding421,762,760
10 Day Avg. Volume2,710,847
30 Day Avg. Volume4,029,978
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)11.76
Price to Cash Flow (P/CF)85.00
P/FCF Ratio81.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$84.50Price Target Upside6.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
CoStar Group Business Overview & Revenue Model
Company DescriptionCoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America. It offers CoStar Property that provides inventory of office, industrial, retail, multifamily, hospitality, and student housing properties and land; CoStar COMPS, a robust database of comparable commercial real estate sales transactions; CoStar Market Analytics to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytical tool that provides tenant information. The company also provides Lease Comps and Analysis, a tool to capture, manage, and maintain lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially-zoned parcels; CoStar Real Estate Manager, a real estate lease administration, portfolio management, and lease accounting compliance software solution; and CoStar Risk Analytics and CoStar Investment. In addition, it offers apartment marketing sites, such as ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, WestsideRentals.com, AFTER55.com, CorporateHousing.com, ForRentUniversity.com, Apartamentos.com, and Off Campus Partners; LoopNet Premium Lister; LoopNet Diamond, Platinum, and Gold Ads; LandsofAmerica.com, LandAndFarm.com, and LandWatch.com for rural land for-sale; BizBuySell.com, BizQuest.com, and FindaFranchise.com for operating businesses and franchises for-sale; Ten-X, an online auction platform for commercial real estate; and HomeSnap, an online and mobile software platform, as well as Homes.com, a homes for sale listings site. CoStar Group, Inc. was founded in 1987 and is headquartered in Washington, the District of Columbia.
How the Company Makes MoneyCoStar Group generates revenue primarily through subscription-based services and advertising. Its key revenue streams include subscription fees for access to its commercial real estate databases and analytics services, which are utilized by real estate professionals for market research, property valuation, and decision-making. Additionally, CoStar earns revenue from advertising and listing fees on its online marketplaces, such as Apartments.com and LoopNet, where property owners and managers list their properties for sale or lease. The company also benefits from strategic acquisitions that expand its data offerings and market reach, as well as partnerships with real estate firms and other entities that enhance its service portfolio.
CoStar Group Financial Statement Overview
Summary
CoStar Group's financial health is strong, with robust revenue growth and a solid balance sheet characterized by low leverage. However, challenges exist in maintaining profitability due to declining net and EBIT margins. Despite these challenges, cash flow remains positive, supporting liquidity.Income Statement
CoStar Group shows strong revenue growth with a 11.45% increase from 2023 to 2024. However, the net profit margin decreased significantly due to a drop in net income. Gross profit margin remains robust at 79.61%, indicating effective cost management. The EBIT and EBITDA margins have substantially declined, impacting overall profitability.85
Very Positive
Balance Sheet
The balance sheet is strong with a high equity ratio of 81.58%, suggesting financial stability and low leverage. The debt-to-equity ratio is low at 0.02, indicating minimal reliance on debt financing. Return on equity is modest at 1.84%, reflecting the impact of reduced net income.92
Very Positive
Cash Flow
Operating cash flow decreased, yet free cash flow remained positive, indicating good liquidity management. The free cash flow to net income ratio is strong, though free cash flow growth has slowed compared to previous years. The operating cash flow to net income ratio is healthy at 2.83, suggesting efficient cash generation.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.74B | 2.46B | 2.18B | 1.94B | 1.66B |
| Gross Profit | ||||
| 2.18B | 1.96B | 1.77B | 1.59B | 1.35B |
| EBIT | ||||
| 4.70M | 282.30M | 450.95M | 432.34M | 289.20M |
| EBITDA | ||||
| 4.70M | 389.80M | 662.83M | 571.90M | 406.15M |
| Net Income Common Stockholders | ||||
| 138.70M | 374.70M | 369.50M | 292.60M | 227.13M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.68B | 5.22B | 4.97B | 3.83B | 3.76B |
| Total Assets | ||||
| 9.26B | 8.92B | 8.40B | 7.26B | 6.92B |
| Total Debt | ||||
| 158.50M | 1.11B | 1.11B | 1.12B | 1.14B |
| Net Debt | ||||
| -4.52B | -4.11B | -3.86B | -2.71B | -2.61B |
| Total Liabilities | ||||
| 1.70B | 1.58B | 1.53B | 1.55B | 1.54B |
| Stockholders Equity | ||||
| 7.55B | 7.34B | 6.87B | 5.71B | 5.38B |
| Cash Flow | Free Cash Flow | |||
| 392.60M | 464.20M | 420.05M | 404.51M | 437.76M |
| Operating Cash Flow | ||||
| 392.60M | 489.50M | 478.62M | 469.73M | 486.11M |
| Investing Cash Flow | ||||
| -912.90M | -238.60M | -69.06M | -381.34M | -464.16M |
| Financing Cash Flow | ||||
| -13.70M | -3.70M | 733.98M | -15.68M | 2.66B |
CoStar Group Technical Analysis
Positive
79.31
Price Trends
76.95
Positive
75.86
Positive
75.69
Positive
Market Momentum
0.95
Negative
54.07
Neutral
69.91
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSGP, the sentiment is Positive. The current price of 79.31 is above the 20-day moving average (MA) of 78.42, above the 50-day MA of 76.95, and above the 200-day MA of 75.69, indicating a bullish trend. The MACD of 0.95 indicates Negative momentum. The RSI at 54.07 is Neutral, neither overbought nor oversold. The STOCH value of 69.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSGP.
CoStar Group Risk Analysis
CoStar Group disclosed 38 risk factors in its most recent earnings report. CoStar Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CoStar Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $33.45B | 233.33 | 1.86% | ― | 11.45% | -63.09% | |
66 Neutral | $2.64B | 25.24 | 3.83% | ― | 8.31% | -49.90% | |
64 Neutral | $16.59B | ― | -2.39% | ― | 14.96% | 29.56% | |
63 Neutral | $1.52B | ― | -7.50% | 2.01% | 6.69% | -137.52% | |
61 Neutral | $4.71B | 17.72 | -2.95% | 11.43% | 6.02% | -21.34% | |
58 Neutral | $1.30B | ― | 199.35% | ― | -4.16% | -17.19% | |
57 Neutral | $16.59B | ― | -2.39% | ― | 14.96% | 29.56% |
* Real Estate Sector Average
Performance Comparison
CSGP
CoStar Group
79.31
-15.21
-16.09%
Z
Zillow Group Class C
68.74
20.52
42.55%
ZG
Zillow Group Class A
67.20
19.80
41.77%
EXPI
eXp World Holdings
9.97
0.02
0.20%
RDFN
Redfin
10.21
3.64
55.40%
REZI
Resideo Technologies
17.82
-4.23
-19.18%
CoStar Group Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: 5.10% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook with strong revenue growth, significant improvements in EBITDA, and strategic expansions in sales capabilities and market presence. However, challenges remain due to economic volatility, competitive market shifts, and modest growth in some segments.Highlights
Record Revenue Growth
CoStar Group achieved full-year revenue of $2.74 billion in 2024, marking an 11% increase over 2023, driven by consistent double-digit growth for 55 consecutive quarters.
Strong EBITDA Performance
Adjusted EBITDA for Q4 2024 reached $112 million, significantly exceeding the guidance range of $76 million to $86 million.
Homes.com Sales Force Expansion
The Homes.com sales force expanded nearly six-fold in one year to 277 salespeople, with plans to reach 500 by the end of 2025, enhancing sales and service capabilities.
High Net Promoter Scores (NPS)
CoStar's NPS improved across regions, with U.S. at 65%, Canada at 60%, and the U.K. at 65%. Specifically, U.K.'s NPS increased by 35%.
Apartments.com Market Leadership
Apartments.com delivered 4.8 times more leases than competitors, reaching 90% of renters and achieving high brand awareness.
Homes.com Traffic Growth
Homes.com reported 110 million average monthly unique visitors in Q4 2024, nearly doubling realtor.com's traffic.
Lowlights
Challenges with Redfin and RentPath
Redfin's acquisition of RentPath did not perform as expected, leading to major layoffs and a shift of assets to Zillow, reducing competition in the market.
Interest Rate and Economic Volatility
High interest rates and economic volatility posed challenges throughout 2024, impacting the commercial real estate market.
Withdrawal of Five-Year Revenue and EBITDA Targets
CoStar withdrew its five-year revenue and EBITDA targets due to unforeseen prolonged downturns in commercial and residential markets.
LoopNet Modest Growth
LoopNet revenue growth was modest at 5% for Q4 and 6% for the full year, with expectations for mid-single-digit growth continuing into 2025.
Company Guidance
During the CoStar Group's Q4 2024 earnings call, the company reported robust financial performance, with full-year revenue reaching $2.74 billion, marking an 11% year-over-year increase. The fourth quarter alone saw revenue of $709 million, also an 11% increase. CoStar's net income rose from $7 million in Q1 to $60 million in Q4, and adjusted EBITDA grew significantly, from $12 million to $112 million over the same period, surpassing the guidance range of $76 million to $86 million. The company's commercial information and marketplace businesses maintained a strong 43% profit margin for the year. CoStar's average monthly unique visitors increased by 17% year-over-year to 134 million, and net new bookings for Q4 were $53 million, up 21% sequentially. The company plans to expand its sales force by 35% in 2025, aiming for significant growth in its Homes.com platform, which saw its sales team grow nearly six-fold in 2024. CoStar set its 2025 revenue guidance between $2.985 billion and $3.015 billion, with expected growth in key segments such as Apartments.com and LoopNet, while also announcing a $500 million share buyback program.CoStar Group Corporate Events
M&A TransactionsBusiness Operations and Strategy
CoStar Group Completes Acquisition of Matterport
Positive
Feb 28, 2025
On February 28, 2025, CoStar Group completed its acquisition of Matterport, a leader in 3D digital twin technology, marking a significant step in advancing AI-driven real estate solutions. This merger aims to accelerate the adoption of digital twin technology across the global real estate sector, enhancing property insights and expanding the use of AI, computer vision, and machine learning, positioning the combined company at the forefront of real estate technology innovation.
Stock BuybackFinancial Disclosures
CoStar Group Reports 11% Revenue Growth in 2024
Positive
Feb 18, 2025
In 2024, CoStar Group reported an 11% increase in annual revenue, reaching $2.74 billion compared to 2023, with fourth-quarter revenue also increasing by 11% year-over-year. The company achieved a significant milestone with its 55th consecutive quarter of double-digit revenue growth. Homes.com emerged as the second-largest residential real estate marketplace in the U.S., reaching 110 million average monthly unique visitors in the fourth quarter of 2024, nearly doubling Realtor.com’s audience. Additionally, CoStar’s Board approved a stock repurchase program authorizing up to $500 million in share buybacks, reflecting confidence in the company’s ongoing growth and market position.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.