CoStar Group, Inc. (CSGP), headquartered in Washington, D.C., with a market cap of $30 billion, is a leading provider of commercial real estate information, analytics, and online marketplaces. Known for its innovative technology and commitment to delivering reliable data solutions, CoStar empowers clients to make informed decisions in the real estate industry.
Companies valued at over $10 billion are typically classified as “large-cap stocks,” a category CoStar Group exemplifies through its robust market presence and leadership in the commercial real estate sector. CoStar’s dedication to innovation, accuracy, and customer-focused solutions underscores its position as a pivotal player in transforming the real estate industry.
Shares of the REIT are currently trading 29.5% below their 52-week high of $100.38, reached on Mar. 18. Over the past three months, the stock has fallen 7.9%, outperforming the Real Estate Select Sector SPDR Fund (XLRE), which declined 9.2% over the same period.
However, over the past 52 weeks, CSGP stock has declined 19.8%, significantly underperforming the XLRE, which has gained 3.3% over the past year.
CoStar Group has been consistently trading below its 200-day and 50-day moving averages since May, with a few fluctuations, signaling a persistent bearish trend.
CoStar Group reported its Q3 earnings on Oct. 22, causing its stock to drop 5.3% in the next trading session. Adjusted earnings fell 26.7% year-over-year to $0.22 per share but beat Wall Street’s estimate of $0.16 per share. Revenue rose 10.9% year-over-year to $692.6 million but missed analysts’ expectations.
The company raised its 2024 guidance, now projecting full-year revenue between $2.72 billion and $2.73 billion, reflecting 11% year-over-year growth at the midpoint. For Q4 2024, CoStar expects revenue between $693 million and $703 million, along with adjusted EBITDA ranging from $76 million to $86 million. Non-GAAP net income per share is forecasted to be between $0.67 and $0.69 for the current year and between $0.21 and $0.23 for fiscal Q4.
Highlighting the contrast in performance, rival CBRE Group, Inc. (CBRE) has outperformed CSGP and the border index, with a 40.9% gain over the 52 weeks and 38.5% on a YTD basis.
Given CoStar Group's recent performance, analysts remain cautiously optimistic about the stock's prospects. CSGP holds a consensus "Moderate Buy" rating from 12 analysts covering the stock. It has a mean price target of $91.09, indicating a potential upside of 28.7% from its current level.
