Headquartered in Washington, DC, CoStar Group, Inc. (CSGP) offers information services for the commercial real estate industry, including leasing and selling marketplaces, property marketing, sales data, tenant information, and industry news. With a market cap of $31.4 billion, its platform is supported by comprehensive national databases, a large research department, and numerous participating organizations, providing a robust foundation for their digital services.
Shares of the REIT have considerably underperformed the broader market over the past 52 weeks. CSGP has declined 2.9% during this period, contrasting with the S&P 500 Index's ($SPX) robust rally of 27.5%. Moreover, in 2024, CSGP shares plunged 10.9%, lagging behind SPX's 17.8% gain on a YTD basis.
Zooming in further, CSGP has also surpassed the US Real Estate iShares ETF (IYR), which has returned 18.1% over the past 52 weeks and gained 8.3% on a YTD basis.
On Jul. 23, CoStar Group reported its Q2 earnings and its stock rose 2% in the following trading session. Its adjusted earnings were 15 cents per share, surpassing Wall Street's expectation of 9 cents per share. The company's revenue was $677.8 million, slightly above forecasts. For the full year, the company anticipates earnings of 64 cents per share to 66 cents per share.
For the current fiscal year, ending in December, analysts expect CSGP’s FFO to decline 54.2% year over year to $0.49 per share. The company's earnings surprise history is mixed. It topped the consensus estimates in three of the last four quarters, missing on one occasion.
The consensus rating among the 14 analysts covering the stock is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, three “Moderate Buy,” and three “Holds.”
This configuration has remained steady over the past three months.
On Aug. 5, JPMorgan Chase & Co. (JPM) analyst Alexei Gogolev raised the price target for CoStar Group to $108 from $102 while maintaining an “Overweight” rating on the shares. This update followed his attendance at the Inman Conference, where he gained insights into the company's performance. Gogolev noted that while CoStar's residential business is currently dragging down the overall valuation, this situation is expected to improve as Homes.com continues to demonstrate strong booking growth.
The mean price target of $94.58 represents a 21.5% premium to CSGP’s current price levels. The Street-high price target of $108 suggests an upside potential of 38.7%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
