CoStar Group (CSGP) AI Stock Analysis

• Market Cap: $31.47B
• Dividend Yield: N/A
• Average Volume (3M): 3.61M
• Price to Earnings (P/E): 259.5
• Beta (1Y): 1.01
• Revenue Growth: 11.27%
• EPS Growth: -60.22%
• Country: US
• Employees: 6,593
• Sector: Real Estate
• Sector Strength: 81
• Industry: Real Estate - Services
• EPS (TTM): 0.14
• Shares Outstanding: 421,886,660
• 10 Day Avg. Volume: 4,379,526
• 30 Day Avg. Volume: 3,610,994
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 13.58
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $88.17
• Price Target Upside: 18.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

CoStar Group shows strong financial performance supported by robust revenue growth and a solid balance sheet. The technical analysis indicates near oversold conditions, providing a potential upside. However, the high valuation poses a risk. Positive corporate events and earnings call insights suggest strategic growth and resilience in a challenging market environment.

Positive Factors

Earnings

CoStar reported better-than-expected first-quarter results with revenue surpassing both estimates and consensus.

Growth Strategy

Homes.com is viewed as a significant long-term opportunity that could provide upside to CoStar Group's share price despite current early-stage volatility.

Strategic Acquisitions

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

Competitive Pressures

Investors are concerned about large competitors encroaching on the Multifamily space, potentially impacting Apartments.com's share gains and margins.

Financial Performance

Current financial performance is below expectations because of challenging market conditions.

Growth Challenges

Net new bookings were down 35% year-over-year, which could signal challenges in growth compared to the previous year.

CoStar Group Business Overview & Revenue Model

Company Description

CoStar 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 Money

CoStar 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 demonstrates solid revenue growth and a strong balance sheet with low leverage, positioning it well in the real estate services industry. However, challenges in operational profitability and cash flow volatility pose potential risks. Continued focus on enhancing operational efficiency and cash generation could bolster financial performance.

Income Statement

CoStar Group's TTM revenue grew by 2.77% from the previous year, indicating steady growth in the real estate services industry. Despite this, the company experienced a slight net income decline, impacting the net profit margin, which decreased to 4.17%. The EBIT margin turned negative, signaling operational challenges. However, the EBITDA margin remains positive at 4.21%, suggesting some resilience in operational cash generation.

Balance Sheet

The company's balance sheet is robust with a low debt-to-equity ratio of 0.02, highlighting minimal leverage and financial stability. The equity ratio stands at a healthy 82.02%, reflecting strong asset backing by equity. Return on equity is modest at 1.37%, indicating room for improvement in profitability.

Cash Flow

CoStar Group's free cash flow turned positive in the TTM, showing a recovery from previous negative figures. However, the free cash flow growth rate is volatile. The operating cash flow to net income ratio is 2.58, suggesting efficient cash conversion, yet the free cash flow to net income ratio is only 0.38, indicating limited free cash generation relative to net income.

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
151.60M	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
1.15B	1.11B	1.11B	1.12B	1.14B
	Net Debt
-3.53B	-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
-245.30M	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

• Technical Analysis Sentiment: Negative
• Last Price: 74.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSGP, the sentiment is Negative. The current price of 74.57 is below the 20-day moving average (MA) of 78.67, below the 50-day MA of 78.17, and below the 200-day MA of 76.22, indicating a bearish trend. The MACD of -0.80 indicates Positive momentum. The RSI at 42.97 is Neutral, neither overbought nor oversold. The STOCH value of 13.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSGP.

CoStar Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CBRE	75 Outperform	$36.93B	37.83	12.15%	―	13.14%	1.70%
BEKE	72 Outperform	$24.49B	43.49	5.66%	1.61%	18.14%	-30.84%
CSGP	70 Outperform	$31.47B	259.53	1.47%	―	11.27%	-60.22%
CWK	70 Outperform	$2.33B	14.46	9.53%	―	1.24%	1205.18%
JLL	67 Neutral	$10.92B	20.37	8.16%	―	13.63%	78.40%
Sector *	60 Neutral	$2.81B	11.04	0.20%	8508.34%	6.12%	-16.66%
NMRK	55 Neutral	$2.04B	28.31	4.90%	1.07%	14.61%	90.42%

CoStar Group Corporate Events

CoStar Group to Acquire Majority of Domain Holdings

On May 9, 2025, CoStar Group entered into a binding Scheme Implementation Deed with Domain Holdings Australia Limited to acquire the remaining 83% of Domain’s shares it does not already own, for a total cash consideration of $4.43 AUD per share. This acquisition, valued at approximately $2.3 billion AUD, is subject to various approvals and conditions, including shareholder and court approvals, and is expected to significantly impact CoStar Group’s market positioning by expanding its presence in the Australian real estate market.

Spark’s Take on CSGP Stock

According to Spark, TipRanks’ AI Analyst, CSGP is a Neutral.

CoStar Group’s overall score reflects strong financial performance and positive earnings call insights, indicating a robust business foundation. However, a high valuation and challenging commercial real estate environment pose risks. Technical indicators suggest potential future appreciation, and recent corporate events signal a positive strategic direction.

To see Spark’s full report on CSGP stock, click here.

CoStar Group Revamps Board with New Appointments

On April 6, 2025, CoStar Group announced significant changes to its Board of Directors, adding John Berisford, Rachel Glaser, and Christine McCarthy as independent directors, while Michael Klein, Christopher Nassetta, and Laura Kaplan retired. Louise Sams was appointed as the new Chairperson of the Board. The company also established a Capital Allocation Committee to evaluate investments and financial targets, supported by agreements with D. E. Shaw and Third Point. These changes are part of CoStar’s efforts to enhance corporate governance and drive stockholder value.

Spark’s Take on CSGP Stock

According to Spark, TipRanks’ AI Analyst, CSGP is a Outperform.

CoStar Group’s overall score reflects its strong financial performance and positive earnings call insights, indicating a robust business foundation. However, the high valuation and certain economic challenges pose risks. Technical indicators suggest a stable market position with potential for future appreciation.

To see Spark’s full report on CSGP stock, click here.

CoStar Group Completes Acquisition of Matterport

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.

CoStar Group Reports 11% Revenue Growth in 2024

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.