CoStar Group, Inc. (CSGP) | Investment Case

1. Company Snapshot

1.a. Company Description

CoStar Group, Inc.provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America.It offers CoStar Property that provides inventory of office, industrial, retail, multifamily, hospitality, and student housing properties and land; CoStar COMPS, a robust database of comparable commercial real estate sales transactions; CoStar Market Analytics to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytical tool that provides tenant information.

The company also provides Lease Comps and Analysis, a tool to capture, manage, and maintain lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially-zoned parcels; CoStar Real Estate Manager, a real estate lease administration, portfolio management, and lease accounting compliance software solution; and CoStar Risk Analytics and CoStar Investment.In addition, it offers apartment marketing sites, such as ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, WestsideRentals.com, AFTER55.com, CorporateHousing.com, ForRentUniversity.com, Apartamentos.com, and Off Campus Partners; LoopNet Premium Lister; LoopNet Diamond, Platinum, and Gold Ads; LandsofAmerica.com, LandAndFarm.com, and LandWatch.com for rural land for-sale; BizBuySell.com, BizQuest.com, and FindaFranchise.com for operating businesses and franchises for-sale; Ten-X, an online auction platform for commercial real estate; and HomeSnap, an online and mobile software platform, as well as Homes.com, a homes for sale listings site.CoStar Group, Inc.

was founded in 1987 and is headquartered in Washington, the District of Columbia.

Show Full description

1.b. Last Insights on CSGP

CoStar Group's recent performance was negatively impacted by increasing expenses, which offset the company's 58th consecutive double-digit growth quarter. Despite beating earnings and revenue estimates, the stock fell due to higher SG&A spend not delivering sufficient growth, prompting a rating downgrade. The company's Q3 earnings call highlighted a robust portfolio of marketplaces, but investors seemed to focus on the negative aspects. With a predicted decline in earnings, investors are cautious about the stock's prospects. (Source: CoStar: SG&A Spend Isn't Delivering Enough Growth (Rating Downgrade))

1.c. Company Highlights

Last Price	68.19
Change Percentage	-0.01%
Open	67.81
Previous Close	68.19
Market Cap ( Millions)	28898
Volume	1278680
Year High	97.43
Year Low	63.82
M A 50	73.42
M A 200	80.03

FCF Yield	0.98%
Dividend Yield	0.00%
ROE	0.24%
Debt / Equity	2.15%
Net Debt / EBIDTA	-1155.25%
Price To Book	3.32
Price Earnings Ratio	1410.39
Price To FCF	101.86
Price To sales	9.45
EV / EBITDA	179.2

2. CoStar Group's Q3 2025 Earnings: A Strong Performance

CoStar Group reported a robust financial performance in Q3 2025, with revenue reaching $834 million, a 20% year-over-year increase, marking its 58th consecutive quarter of double-digit revenue growth. Adjusted EBITDA rose to $115 million, up 51% over Q3 '24. The company's earnings per share (EPS) came in at $0.23, beating estimates of $0.1821. The revenue growth was driven by the residential portals segment, which saw a 31.3% year-over-year increase to $411 million, with Apartments.com revenue growing 11% year-over-year to $303 million.

Publication Date: Oct -30

                                    📋 Highlights
                                    Revenue Growth::
                                                CoStar Group's Q3 2025 revenue reached $834 million, a 20% YoY increase, marking 58 consecutive quarters of double-digit growth.
Adjusted EBITDA Surge::
                                                Adjusted EBITDA rose 51% YoY to $115 million, driven by strong performance in residential and commercial segments.
Residential Portals Expansion::
                                                Homes.com revenue grew 20% YoY, with 115 million unique monthly visitors (8.3% growth vs. declines at Zillow and Realtor.com).
AI-Driven Innovations::
                                                50% of Homes.com's software development focused on AI, including AI Smart Search, improving user engagement and subscriber NPS by 84% QoQ.
Competitive Legal Advantages::
                                                Zillow faces 5 lawsuits (antitrust, copyright, consumer deception), while CoStar filed a lawsuit against Zillow for IP theft, strengthening its market position.

                                

Segment Performance

The residential portals segment was a key driver of growth, with Homes.com revenue increasing 20% year-over-year and net new bookings rising 53% quarter-over-quarter. The company has over 26,000 subscribing agents and 130,000 active listings on Homes.com, with the Homes.com network achieving 115 million unique monthly visitors, up 8.3% compared to a decline at Zillow and Realtor.com. The UK residential marketplace, OnTheMarket, also had a strong quarter, with leads up 21% year-over-year. Domain, acquired in August, generated 7.4 million unique users in September, its highest ever.

Competitive Advantage

CoStar Group is investing heavily in AI-empowered features, including AI Smart Search, which has produced significant improvements in user engagement. The company is also enhancing its Matterport benefit to subscribers, adding a photorealistic 3D view of a house's exterior. This technology complements the digital twin of the interior, providing a comprehensive view of the property. As Zillow faces multiple lawsuits, including allegations of antitrust violations and copyright theft, CoStar Group is poised to gain market share.

Valuation

With a P/S Ratio of 9.77 and an EV/EBITDA of 185.62, CoStar Group's valuation appears to be pricing in significant growth expectations. Analysts estimate next year's revenue growth at 17.5%, which may be challenging to sustain given the company's already high growth rate. However, with a strong track record of innovation and a robust financial position, with $2 billion in cash, CoStar Group is well-positioned to continue its growth trajectory.

Growth Prospects

The company's Australian business has significant growth potential, with plans to integrate Homes.com, CoStar, and LoopNet platforms. Additionally, CoStar Group is excited about launching its new rent analytics product in the first half of 2026 and its new lease platform in the fourth quarter of 2026. With a strong financial performance and a solid growth pipeline, CoStar Group is an attractive investment opportunity in the real estate technology space.

3. NewsRoom

Rep. Gilbert Ray Cisneros, Jr. Buys CoStar Group, Inc. (NASDAQ:CSGP) Shares

Nov -21

Source: defenseworld.net

CoStar Group, Inc. (CSGP) Presents at Stephens Annual Investment Conference 2025 Transcript

Nov -20

Source: seekingalpha.com

CoStar projects yields to ease across CRE property types in 2026

Nov -20

Source: businesswire.com

17 Capital Partners LLC Buys 1,775 Shares of CoStar Group, Inc. $CSGP

Nov -20

Source: defenseworld.net

CTSH vs. CSGP: Which Stock Should Value Investors Buy Now?

Nov -19

Source: zacks.com

Allianz SE Acquires 30,540 Shares of CoStar Group, Inc. $CSGP

Nov -14

Source: defenseworld.net

ABN Amro Investment Solutions Takes Position in CoStar Group, Inc. $CSGP

Nov -14

Source: defenseworld.net

Homes.com Report: U.S. Home Price Appreciation Remained Muted in October

Nov -13

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.50%)

6. Segments

Internet Information Providers

Expected Growth: 8.5%

CoStar Group's growth is driven by increasing demand for commercial property information, expansion into new markets, and rising adoption of technology-enabled solutions.

7. Detailed Products

CoStar Suite

A comprehensive platform providing commercial real estate professionals with accurate and timely data, analytics, and market insights to inform their business decisions.

LoopNet

A leading online marketplace for commercial real estate, providing a platform for property owners, brokers, and tenants to list, search, and lease or buy properties.

CoStar Go

A mobile app providing on-the-go access to CoStar's comprehensive commercial real estate data, including property details, sales history, and market analytics.

CoStar Analytics

A suite of analytics tools providing detailed market insights, trends, and forecasts to help commercial real estate professionals make informed decisions.

CoStar Property

A comprehensive database of commercial property information, including detailed property profiles, sales history, and market data.

CoStar COMPS

A comprehensive database of commercial property sales data, providing detailed information on sales transactions, property characteristics, and market trends.

8. CoStar Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

CoStar Group, Inc. operates in a niche market, providing commercial real estate information, analytics, and online marketplaces. While there are some substitutes available, they are not as comprehensive or widely adopted as CoStar's offerings.

Bargaining Power Of Customers

CoStar Group, Inc. has a diverse customer base, including commercial real estate brokers, investors, and lenders. While customers have some bargaining power, CoStar's strong brand and comprehensive offerings limit their ability to negotiate prices.

Bargaining Power Of Suppliers

CoStar Group, Inc. has a diverse supplier base, including data providers and technology vendors. While suppliers have some bargaining power, CoStar's scale and negotiating power limit their ability to dictate prices.

Threat Of New Entrants

Entering the commercial real estate information and analytics market requires significant investment in data collection, processing, and analysis. Barriers to entry, including high upfront costs and the need for specialized expertise, limit the threat of new entrants.

Intensity Of Rivalry

The commercial real estate information and analytics market is moderately competitive, with a few established players competing for market share. While rivalry exists, CoStar Group, Inc.'s strong brand and comprehensive offerings help to differentiate it from competitors.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	13.14%
Debt Cost	8.15%
Equity Weight	86.86%
Equity Cost	8.15%
WACC	8.15%
Leverage	15.13%

11. Quality Control: CoStar Group, Inc. passed 3 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Welltower

A-Score: 5.7/10

Value: 0.9

Growth: 3.9

Quality: 5.4

Yield: 5.0

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

Prologis

A-Score: 5.7/10

Value: 1.9

Growth: 6.7

Quality: 6.7

Yield: 6.0

Momentum: 4.0

Volatility: 8.7

1-Year Total Return ->

American Tower

A-Score: 5.2/10

Value: 1.8

Growth: 4.8

Quality: 5.5

Yield: 7.0

Momentum: 3.0

Volatility: 9.3

1-Year Total Return ->

CBRE

A-Score: 4.7/10

Value: 2.4

Growth: 5.7

Quality: 4.8

Yield: 0.0

Momentum: 7.5

Volatility: 8.0

1-Year Total Return ->

CoStar

A-Score: 4.3/10

Value: 2.8

Growth: 4.9

Quality: 4.5

Yield: 0.0

Momentum: 6.0

Volatility: 7.3

1-Year Total Return ->

Marcus Millichap

A-Score: 3.9/10

Value: 5.1

Growth: 1.4

Quality: 5.0

Yield: 3.0

Momentum: 2.0

Volatility: 6.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

66.89%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.15%

CoStar Group, Inc. - US22160N1090

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CSGP

1.c. Company Highlights

Expensive

Lower Yield

Higher Growth

Earnings Beats

Revenues Beats

Weak Momentum

Average Growth

Stable Momentum

Strong Momentum

2. CoStar Group's Q3 2025 Earnings: A Strong Performance

Segment Performance

Competitive Advantage

Valuation

Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.50%)

6. Segments

Internet Information Providers

Expected Growth: 8.5%

7. Detailed Products

CoStar Suite

LoopNet

CoStar Go

CoStar Analytics

CoStar Property

CoStar COMPS

8. CoStar Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: CoStar Group, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

68.18$

Current Price

68.19$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA