CoStar Group (CSGP) AI Stock Analysis

• Market Cap: $34.75B
• Dividend Yield: N/A
• Average Volume (3M): 2.77M
• Price to Earnings (P/E): 282.4
• Beta (1Y): 0.98
• Revenue Growth: 11.27%
• EPS Growth: -60.22%
• Country: US
• Employees: 6,593
• Sector: Real Estate
• Sector Strength: 67
• Industry: Real Estate - Services
• EPS (TTM): 0.14
• Shares Outstanding: 421,886,660
• 10 Day Avg. Volume: 3,146,399
• 30 Day Avg. Volume: 2,766,063
• PEG Ratio: 3.45
• Price to Book (P/B): 4.46
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 72.91
• Enterprise Value/Market Cap: 0.77
• Enterprise Value/Revenue: 2.47
• Enterprise Value/Gross Profit: 12.02
• Enterprise Value/Ebitda: 38.91
• 1Y Price Target: $87.75
• Price Target Upside: 8.12% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 72 Outperform
• Price Target: $86.00 ▲(5.96%Upside)

CoStar Group's strong earnings call performance and strategic corporate events boost its overall score. However, the high P/E ratio indicates overvaluation, and operational profitability challenges pose risks. Technical indicators suggest some stability, but bearish momentum persists.

Positive Factors

Governance

The company appointed three new independent directors, which should alleviate some investor concerns on governance.

International Expansion

Domain would represent CoStar’s first major foray into the Asia-Pacific market, and international expansion is becoming a bigger priority for the company.

Salesforce Expansion

CoStar continues to materially expand its salesforce across many of its businesses, and is now on track to have over 700 dedicated.

Negative Factors

Market Conditions

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

Net Bookings Decline

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

Profitability Concerns

Increases the probability that the drag on total profitability from Homes.com investments will not persist indefinitely.

CoStar Group Business Overview & Revenue Model

Company Description

CoStar Group, Inc. (CSGP) is a leading provider of commercial real estate information, analytics, and online marketplaces. The company operates primarily in the sectors of commercial real estate, real estate investment, and real estate technology. CoStar Group's core products and services include comprehensive databases of real estate information, advanced analytics tools, and a suite of online marketplaces designed to connect buyers, sellers, and lessees of commercial properties.

How the Company Makes Money

CoStar Group generates revenue primarily through subscription fees for access to its extensive databases and analytics services. Clients, including real estate professionals, investors, and financial institutions, pay for subscriptions to obtain detailed information on commercial properties, market trends, and analytics. Additionally, CoStar Group earns money through its online marketplaces, such as LoopNet and Apartments.com, where it provides advertising services for property owners and managers seeking to reach potential tenants or buyers. Significant partnerships with industry organizations and continuous investments in technology and data acquisition further enhance its offerings, contributing to its revenue growth.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.81B	2.74B	2.46B	2.18B	1.94B	1.66B
	Gross Profit
2.23B	2.18B	1.96B	1.77B	1.59B	1.35B
	EBIT
-500.00K	4.70M	282.30M	450.95M	432.34M	289.20M
	EBITDA
165.70M	151.60M	389.80M	662.83M	571.90M	406.15M
	Net Income Common Stockholders
117.20M	138.70M	374.70M	369.50M	292.60M	227.13M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.97B	4.68B	5.22B	4.97B	3.83B	3.76B
	Total Assets
10.43B	9.26B	8.92B	8.40B	7.26B	6.92B
	Total Debt
1.14B	1.15B	1.11B	1.11B	1.12B	1.14B
	Net Debt
-2.54B	-3.53B	-4.11B	-3.86B	-2.71B	-2.61B
	Total Liabilities
1.87B	1.70B	1.58B	1.53B	1.55B	1.54B
	Stockholders Equity
8.56B	7.55B	7.34B	6.87B	5.71B	5.38B
Cash Flow		Free Cash Flow
-34.00M	-245.30M	464.20M	420.05M	404.51M	437.76M
	Operating Cash Flow
302.80M	392.60M	489.50M	478.62M	469.73M	486.11M
	Investing Cash Flow
-1.44B	-912.90M	-238.60M	-69.06M	-381.34M	-464.16M
	Financing Cash Flow
-35.10M	-13.70M	-3.70M	733.98M	-15.68M	2.66B

CoStar Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 81.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 81.16 is above the 20-day moving average (MA) of 76.84, above the 50-day MA of 77.29, and above the 200-day MA of 76.36, indicating a bullish trend. The MACD of 1.24 indicates Negative momentum. The RSI at 63.16 is Neutral, neither overbought nor oversold. The STOCH value of 88.13 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSGP.

CoStar Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
JLL	77 Outperform	$11.47B	21.43	8.16%	―	13.63%	78.40%
CBRE	74 Outperform	$40.40B	40.61	12.15%	―	13.14%	1.70%
BEKE	74 Outperform	$23.23B	35.99	6.53%	1.90%	34.99%	28.80%
CSGP	72 Outperform	$34.75B	282.39	1.47%	―	11.27%	-60.22%
CWK	71 Outperform	$2.50B	15.04	9.53%	―	1.24%	1205.18%
NMRK	64 Neutral	$2.19B	28.95	5.32%	1.01%	13.87%	90.42%
Sector *	61 Neutral	$2.85B	10.72	0.40%	6.07%	5.80%	-21.26%

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.

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.