CoStar Group with Mixed Results: Shareholders Face Uncertain Future

The shareholders of CoStar Group faced a slight setback last week. The company's shares fell by 6.0% to $74.48 following the release of the latest quarterly results, despite an overall respectable outcome: revenue figures of $693 million met analysts' expectations. Surprisingly, the statutory earnings of $0.13 per share were remarkably 67% above predictions. Analysts typically respond to such results by adjusting their forecasts to better assess the company's future development. Prior to the latest quarterly report release, 14 analysts had published consensus estimates for CoStar Group. For 2025, they now expect revenues of $3.08 billion, representing solid growth of 16% compared to the last twelve months. Expected earnings per share could rise impressively by 81% to $0.78. Before the current announcements, revenues were estimated at $3.15 billion and earnings per share at $0.87. Analysts are now less optimistic and have reduced their revenue expectations and earnings forecasts. Interestingly, analysts remained relatively stable regarding the price target, maintaining it at $90.08. Thus, it is assumed that the downgraded expectations will not have a lasting impact on the valuation of CoStar Group. The individual analysts' target prices range from $75 to $103, indicating some uncertainties, yet overall a relatively narrow forecast range. Comparing the expected growth of CoStar Group to the last five years, it becomes apparent that growth forecasts for the coming years, with an annual revenue increase of around 12%, are consistent with the historical growth of 13%. However, when compared to industry forecasts for other covered companies, it shows that while CoStar grows at the same level as its competitors, it does not achieve standout growth.