On Monday, CoStar Group hit an important milestone. Its Relative Strength (RS) Rating jumped into the 80-plus percentile, improving to 82. That rating rose a whopping 19 points from 63 the day before. The rise came largely because of big price target hikes by analysts in the wake of a ruling that could favor CoStar.
The upgraded 82 RS Rating means that CoStar stock beat 82% of all other stocks for price performance over the past year. It's kind of a big deal. Market research shows that the market's biggest winners typically have an RS Rating north of 80 as they begin their biggest climbs.
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CoStar Stock Lifted By NAR Settlement
Washington, D.C.-based CoStar provides real estate information to brokers, property owners, bankers and government agencies. On Friday the National Association of Realtors (NAR) reached a settlement in class-action suit. NAR agreed to no longer require that properties listed on its Multiple Listing Service (MLS) include specific buyer broker commissions.
Additionally, analysts say that opens the door for real estate information services such as CoStar, one of the largest, to provide that information, now that brokers aren't obligated to only go to MLS.
CoStar stock shot up 8.3% Friday and held that gain Monday, rising another 1% to above 96. Among its other key ratings CoStar has a decent 79 Composite Rating out of 99. It has a mild 66 Earnings Per Share Rating but it boasts a B SMR Rating (sales + profit margins + return on equity), reflecting healthy fundamentals.
Meanwhile, CoStar stock is extended and out of buy range after clearing an 89.11 buy point in a first-stage cup with handle. See if the stock forms a new pattern or follow-on buying opportunity like a three-weeks tight or pullback to the 50-day or 10-week line.
Double-Digit Sales Growth For Years
The company showed a 13% drop in earnings growth last quarter, to 33 cents per share. The prior quarter its EPS was flat with the same quarter a year earlier. And the quarter before that, ending June 30, its earnings grew 11%.
However, revenue grew 12% in its latest quarter to $640.1 million, continuing a string of double-digit profit growth quarters going back about three years.
CoStar stock holds the No. 6 rank among its peers in the 16-stock Commercial Services-Market Research industry group. Morningstar, RELX and Moody's are among the top 5 highly rated stocks in the group.
IBD's proprietary Relative Strength Rating identifies technical performance by showing how a stock's price movement over the last 52 weeks compares to that of other stocks on the major indexes.
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