Education
About Us
Working with TipRanks
Follow Us
CoStar Group (CSGP)
NASDAQ:CSGP
Top Page
CoStar Group
(NASDAQ:CSGP)78Outperform
Positive Factors
Acquisition
CSGP's Matterport acquisition boosts its digital marketplace differentiation with AI-powered 3D digital twins enhancing property engagement.
Financial Performance
CSGP's results came in above Street expectations, due to healthy trends across most business segments, notably Costar Suite and Multifamily, and SG&A leverage.
Negative Factors
Guidance
The initial FY25 outlook is disappointing due to softer guidance and expected challenges from weaker bookings quarters impacting growth.
CoStar Group (CSGP) vs. S&P 500 (SPY)
Market Cap
$31.88B
Dividend YieldN/A
Average Volume (3M)3.41M
Price to Earnings (P/E)222.4
Beta (1Y)1.27
Revenue Growth11.45%
EPS Growth-63.09%
CountryUS
Employees6,152
SectorReal Estate
Sector Strength72
IndustryReal Estate
Share Statistics
EPS (TTM)0.34
Shares Outstanding421,762,760
10 Day Avg. Volume5,159,541
30 Day Avg. Volume3,413,966
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)11.30
Price to Cash Flow (P/CF)81.70
P/FCF Ratio78.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$84.45Price Target Upside11.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
CoStar Group Business Overview & Revenue Model
Company DescriptionCoStar Group, Inc. (CSGP) is a leading provider of commercial real estate information, analytics, and online marketplaces. The company operates in sectors such as real estate, technology, and data analytics, offering a comprehensive suite of services that includes property data, market analysis, and digital marketing solutions. Its core products include CoStar Suite, LoopNet, Apartments.com, and STR, which cater to a wide range of real estate professionals, including brokers, owners, investors, and lenders.
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 robust, characterized by strong revenue growth, high gross margins, and a solid balance sheet with low leverage. However, the decline in net income and EBIT margins suggests challenges in maintaining profitability. Cash flow remains positive, supporting liquidity, though growth has tempered. The company's overall financial position is stable with potential for profitability improvement.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
Negative
75.58
Price Trends
74.29
Positive
75.30
Positive
76.02
Negative
Market Momentum
0.25
Positive
49.05
Neutral
42.94
Neutral
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 75.58 is below the 20-day moving average (MA) of 76.39, above the 50-day MA of 74.29, and below the 200-day MA of 76.02, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 49.05 is Neutral, neither overbought nor oversold. The STOCH value of 42.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 | $31.88B | 222.36 | 1.84% | ― | 11.45% | -63.09% | |
66 Neutral | $2.84B | 26.33 | 3.51% | ― | 8.31% | -49.90% | |
63 Neutral | $1.56B | ― | -10.38% | 2.05% | 6.69% | -137.52% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
60 Neutral | $17.96B | ― | -2.31% | ― | 14.96% | 29.56% | |
58 Neutral | $17.96B | ― | -2.31% | ― | 14.96% | 29.56% | |
45 Neutral | $802.57M | ― | 199.35% | ― | -4.16% | -17.19% |
* Real Estate Sector Average
Performance Comparison
CSGP
CoStar Group
75.58
-12.10
-13.80%
ZG
Zillow Group Class A
72.79
18.76
34.72%
EXPI
eXp World Holdings
9.95
-2.07
-17.22%
RDFN
Redfin
6.35
-0.06
-0.94%
REZI
Resideo Technologies
17.60
-4.74
-21.22%
Z
Zillow Group Class C
74.43
18.22
32.41%
CoStar Group Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: 0.16% | 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.