CoStar Group (CSGP) AI Stock Analysis

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CoStar Group

(NASDAQ:CSGP)

Select Model

Neutral 61 (OpenAI - 4o)

Rating:61Neutral

Price Target:

$70.00

▲(2.59% Upside)

CoStar Group's overall score is driven by strong earnings call performance and robust revenue growth. However, the high P/E ratio and declining profitability weigh heavily on the score. Technical indicators suggest bearish momentum, but the stock may be approaching oversold levels.

Positive Factors

Revenue Growth

Consistent double-digit revenue growth over 58 quarters indicates strong market demand and effective business strategies, supporting long-term stability.

AI Integration Success

Successful AI integration enhances user experience and operational efficiency, potentially increasing customer retention and market competitiveness.

Low Leverage

Low leverage provides financial flexibility and reduces risk, allowing the company to invest in growth opportunities without significant debt burden.

Negative Factors

Declining Profitability

Declining profitability may indicate rising costs or pricing pressures, potentially impacting long-term financial health if not addressed.

Cash Flow Challenges

Deteriorating cash flow can limit the company's ability to fund operations and investments, posing a risk to future growth and stability.

Seasonal Trends Impact

Seasonal impacts on bookings suggest potential volatility in revenue streams, which could affect financial predictability and planning.

CoStar Group (CSGP) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$28.92B

Dividend YieldN/A

Average Volume (3M)3.91M

Price to Earnings (P/E)1327.4

Beta (1Y)0.88

Revenue Growth14.61%

EPS Growth-87.93%

CountryUS

Employees6,593

SectorReal Estate

Sector Strength53

IndustryReal Estate - Services

Share Statistics

EPS (TTM)0.23

Shares Outstanding423,822,780

10 Day Avg. Volume2,938,048

30 Day Avg. Volume3,911,480

Financial Highlights & Ratios

PEG Ratio-3.33

Price to Book (P/B)3.85

Price to Sales (P/S)10.63

P/FCF Ratio-118.58

Enterprise Value/Market Cap1.19

Enterprise Value/Revenue11.30

Enterprise Value/Gross Profit14.26

Enterprise Value/Ebitda227.94

Forecast

1Y Price Target

$88.86

Price Target Upside30.24% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

EPS Forecast (FY)0.84

Revenue Forecast (FY)$3.24B

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 through several key streams, primarily from subscription-based services that provide access to its extensive databases and analytical tools. Subscribers pay recurring fees for access to the CoStar Suite, which offers detailed property information and market analytics. Additionally, CoStar earns revenue from transaction-based services, including listing fees and advertising on platforms like LoopNet and Apartments.com, where users can list properties for sale or lease. The company also benefits from long-term contracts with large clients, which provide a stable revenue base. Strategic partnerships with various real estate firms and industry organizations further enhance its market reach and revenue potential, allowing CoStar to maintain a strong competitive advantage in the commercial real estate sector.

CoStar Group Key Performance Indicators (KPIs)

Any

Revenue by Geography

Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.

Chart InsightsCoStar Group's North American revenue has shown consistent growth, reflecting strong market presence and strategic expansion. International revenue, while smaller, is accelerating, with a notable 56% year-over-year growth in Q1 2025. The earnings call highlights robust performance despite a challenging commercial real estate market, driven by successful acquisitions and brand expansion, particularly with Homes.com. However, the commercial sector remains under pressure, potentially impacting future growth. The company’s guidance suggests continued optimism with expected revenue growth supported by ongoing investments in residential segments.

Data provided by:

The Fly

CoStar Group Earnings Call Summary

Earnings Call Date:Jul 22, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Feb 24, 2026

Earnings Call Sentiment Positive

CoStar Group delivered strong financial results with record revenue growth and net new bookings. Significant achievements in Apartments.com and Homes.com were highlighted, alongside international expansion efforts. However, challenges persist with Matterport's profitability and the commercial real estate market.

Q2-2025 Updates

Positive Updates

Record Revenue and Growth

CoStar Group achieved revenue of $781 million, marking a 15% increase compared to last year. This is the 57th consecutive quarter of double-digit revenue growth, with adjusted EBITDA rising 108% compared to Q2 of 2024.

Strong Performance in Apartments.com

Apartments.com had a revenue increase of 11% from Q2 2024, achieving $292 million. The sales team achieved $45 million in net new bookings, representing a 20% year-over-year increase.

Significant Growth in Homes.com

Homes.com delivered strong sales growth with residential annualized net new bookings totaling $12 million for the quarter, a 56% increase in membership during the quarter.

International Expansion and Partnerships

CoStar is in the final stages of acquiring Domain Holdings, one of Australia's largest real estate portals. The U.K. residential marketplace, on the market, achieved 20% year-over-year growth in listings.

Record Net New Bookings

Net new bookings totaled $93 million, a 65% increase over the previous quarter, marking the highest quarterly net new bookings in CoStar Group's history.

Negative Updates

Matterport's Profitability Challenges

Matterport has not yet achieved profitability, and its growth rate has slowed. Operations of Matterport's photography business VHT, which was loss-making, are being wound down.

Traffic Decline in Rental Portals

Traffic on rental portals declined, with the Apartments.com network visits down 11% year-over-year, although less than competitors like Zillow Network (down 13%) and Rent.com (down 39%).

Challenges in the CRE Market

The commercial real estate market continues to face difficulties, particularly in the office segment with high vacancy rates and negative net absorption rates.

Company Guidance

In the second quarter of 2025, CoStar Group reported robust financial performance, achieving a revenue of $781 million, marking a 15% increase year-over-year, and its 57th consecutive quarter of double-digit growth. Adjusted EBITDA surged to $85 million, representing a 108% increase from Q2 2024, surpassing consensus estimates and the high end of the guidance range. The company experienced a record $93 million in net new bookings, a 65% increase over the previous quarter, driven by strong performance across all business segments. Apartments.com revenue rose 11% year-over-year to $292 million, with a notable 20% increase in net new bookings. Homes.com also showed solid growth, with residential annualized net new bookings totaling $12 million for the quarter. CoStar's international business continued to expand, with the U.K. market achieving record net new bookings and revenue growth. The company increased its full-year revenue growth guidance to 15%, anticipating strong third-quarter performance with expected revenue between $800 million and $805 million.

CoStar Group Financial Statement Overview

Summary

CoStar Group shows strong revenue growth and gross profit margins, but faces challenges in operational efficiency and profitability, as reflected in declining net profit margins and negative EBIT. The balance sheet remains robust with low leverage, though profitability from equity is limited. Cash flow concerns arise from significant declines in free cash flow growth, necessitating attention to liquidity management.

Income Statement

Positive

CoStar Group's income statement shows a stable revenue growth rate of 4.84% TTM, though slower compared to previous years. The gross profit margin remains strong at 79.25%, indicating efficient cost management. However, the net profit margin has significantly decreased to 0.66% TTM, primarily due to negative EBIT margins, suggesting challenges in operational efficiency.

Balance Sheet

Positive

The balance sheet reflects a solid equity position with a low debt-to-equity ratio of 0.021 TTM, indicating low financial leverage and risk. However, the return on equity has decreased to 0.24% TTM, suggesting limited profitability from equity investments. The equity ratio remains healthy, supporting financial stability.

Cash Flow

Neutral

Cash flow analysis reveals a concerning decline in free cash flow growth, down by 613.95% TTM, indicating potential liquidity issues. The operating cash flow to net income ratio is 0.47 TTM, showing reduced cash generation efficiency. Despite this, the free cash flow to net income ratio is relatively strong at 0.78 TTM, suggesting some resilience in cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.06B	2.74B	2.46B	2.18B	1.94B	1.66B
Gross Profit	2.42B	2.18B	1.96B	1.77B	1.59B	1.35B
EBITDA	151.50M	151.60M	389.80M	588.90M	571.86M	406.15M
Net Income	20.30M	138.70M	374.70M	369.50M	292.60M	227.13M
Balance Sheet
Total Assets	10.82B	9.26B	8.92B	8.40B	7.26B	6.92B
Cash, Cash Equivalents and Short-Term Investments	2.03B	4.68B	5.22B	4.97B	3.83B	3.69B
Total Debt	1.13B	1.04B	1.11B	1.11B	1.11B	1.12B
Total Liabilities	2.20B	1.70B	1.58B	1.53B	1.55B	1.54B
Stockholders Equity	8.62B	7.55B	7.34B	6.87B	5.71B	5.38B
Cash Flow
Free Cash Flow	283.70M	-245.30M	464.20M	420.05M	404.51M	437.76M
Operating Cash Flow	362.50M	392.60M	489.50M	478.62M	469.73M	486.11M
Investing Cash Flow	-3.10B	-912.90M	-238.60M	-69.10M	-381.34M	-464.16M
Financing Cash Flow	-162.00M	-13.70M	-3.70M	733.98M	-15.68M	2.66B

CoStar Group Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price68.23

Price Trends

50DMA

71.48

Negative

100DMA

80.46

Negative

200DMA

79.75

Negative

Market Momentum

MACD

-0.99

Negative

RSI

46.50

Neutral

STOCH

56.56

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSGP, the sentiment is Neutral. The current price of 68.23 is above the 20-day moving average (MA) of 67.66, below the 50-day MA of 71.48, and below the 200-day MA of 79.75, indicating a neutral trend. The MACD of -0.99 indicates Negative momentum. The RSI at 46.50 is Neutral, neither overbought nor oversold. The STOCH value of 56.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CSGP.

CoStar Group Risk Analysis

CoStar Group disclosed 39 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 (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JLL	79 Outperform	$15.79B	25.65	9.14%	―	12.51%	32.34%
CBRE	70 Outperform	$47.49B	39.42	14.26%	―	14.61%	30.19%
CWK	69 Neutral	$3.54B	16.03	12.21%	―	6.77%	150.72%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
BEKE	62 Neutral	$19.99B	41.89	4.91%	2.08%	25.33%	-15.12%
CSGP	61 Neutral	$28.92B	1,327.43	0.25%	―	14.61%	-87.93%
NMRK	59 Neutral	$3.11B	29.79	8.08%	0.69%	22.22%	94.52%

* Real Estate Sector Average

Performance Comparison

CSGP

CoStar Group

68.23

-6.99

-9.29%

CBRE

CBRE Group

159.58

21.65

15.70%

JLL

Jones Lang Lasalle

334.65

62.88

23.14%

NMRK

Newmark Group

17.32

2.76

18.96%

CWK

Cushman & Wakefield

15.29

0.27

1.80%

BEKE

KE Holdings Inc. Sponsored ADR Class A

17.28

-1.24

-6.70%

CoStar Group Corporate Events

Business Operations and Strategy

CoStar Group Enhances Transparency with Website Updates

Positive

Oct 28, 2025

CoStar Group plans to use its corporate website as a primary channel for distributing important company information, such as investor presentations. This move highlights the company’s commitment to transparency and accessibility, potentially enhancing its communication with stakeholders and aligning with modern digital information dissemination practices.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Dec 09, 2025