CSGP
Real EstateCoStar Group
Price Chart
Market Data
Financials
XBRL · SEC EDGAR2009–2025(17yr)| Metric | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $209.7M | $226.3M | $251.7M | $349.9M | $440.9M | $575.9M | $711.8M | $837.6M | $965.2M | $1.2B | $1.4B | $1.7B | $1.9B | $2.2B | $2.5B | $2.7B | $3.2B | +18.7% |
| Gross Profit | $135.9M | $142.7M | $163.6M | $235.1M | $311.8M | $419.0M | $522.9M | $663.8M | $744.8M | $921.9M | $1.1B | $1.4B | $1.6B | $1.8B | $2.0B | $2.2B | $2.6B | +17.6% |
| Gross Margin | 64.8% | 63.1% | 65.0% | 67.2% | 70.7% | 72.7% | 73.5% | 79.2% | 77.2% | 77.4% | 79.3% | 81.4% | 81.6% | 81.0% | 80.0% | 79.6% | 78.9% | -0.7pp |
| Operating Income | $31.8M | $22.8M | $21.8M | $27.4M | $54.2M | $80.9M | $11.5M | $144.9M | $173.8M | $273.6M | $363.5M | $289.2M | $432.3M | $450.9M | $282.3M | $4.7M | -$72.0M | -1631.9% |
| Operating Margin | 15.2% | 10.1% | 8.6% | 7.8% | 12.3% | 14.0% | 1.6% | 17.3% | 18.0% | 23.0% | 26.0% | 17.4% | 22.2% | 20.7% | 11.5% | 0.2% | -2.2% | -2.4pp |
| Net Income | $18.7M | $13.3M | $14.7M | $9.9M | $29.7M | $44.9M | -$3.5M | $85.1M | $122.7M | $238.3M | $315.0M | $227.1M | $292.6M | $369.5M | $374.7M | $138.7M | $7.0M | -95.0% |
| Net Margin | 8.9% | 5.9% | 5.8% | 2.8% | 6.7% | 7.8% | -0.5% | 10.2% | 12.7% | 20.0% | 22.5% | 13.7% | 15.0% | 16.9% | 15.3% | 5.1% | 0.2% | -4.9pp |
| Free Cash Flow | $29.0M | -$18.1M | $10.7M | $71.3M | $89.3M | $116.5M | $96.2M | $177.2M | $210.2M | $305.8M | $457.8M | $486.1M | $346.0M | $443.5M | $372.0M | -$186.4M | $123.0M | +166.0% |
| FCF Margin | 13.8% | -8.0% | 4.2% | 20.4% | 20.2% | 20.2% | 13.5% | 21.2% | 21.8% | 25.7% | 32.7% | 29.3% | 17.8% | 20.3% | 15.2% | -6.8% | 3.8% | +10.6pp |
| EPS (Diluted) | $0.94 | $0.64 | $0.62 | $0.37 | $1.05 | $1.46 | $-0.11 | $2.62 | $3.66 | $6.54 | $8.60 | $5.93 | $0.74 | $0.93 | $0.92 | $0.34 | $0.02 | -94.1% |
1. THE BIG PICTURE
CoStar Group is a high-margin data utility currently undergoing a massive, expensive transformation into a residential real estate powerhouse. While it leads its peer group in revenue growth and gross margins, the pivot to residential is currently consuming operating profits as CoStar Group spends heavily to challenge entrenched incumbents.
2. WHERE THE RISKS HIT HARDEST
CoStar Group’s "proprietary database" (10-K Item 1) is threatened by "AI-powered platforms" (Risks) because if competitors use AI to aggregate data more efficiently, CoStar’s massive research department—its primary competitive moat—becomes a structural cost burden rather than an advantage. Furthermore, the claim that Homes.com is the "fastest growing" residential marketplace (14A Proxy) is highly vulnerable to "search engine dependency" (Risks); a single algorithm change by Google could sever the traffic flow that fuels this growth. Finally, the strategic priority of integrating Matterport (10-K Item 1) faces "integration risks" (Risks) that could lead to impairment charges, potentially straining a financial position governed by "restrictive covenants" (Risks).
3. WHAT THE NUMBERS SAY TOGETHER
Revenue grew 27% in the fourth quarter of 2025, accelerating significantly beyond the TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter growth rate of 18.7% (XBRL). This surge is driven by the residential segment, which reached $429 million in quarterly revenue (8-K). However, the cost of this growth is visible in the bottom line: net income fell to $47 million from $60 million a year prior (8-K). The contrast between a 79.1% gross margin (1st among peers) and a -3.2% operating margin (6th of 6) reveals that while CoStar’s core data is incredibly profitable to produce, its current marketing and R&DR&DResearch & Development — spending on creating new products or technologies spend is consuming all available profit. Short interest at 5.4% of the float (Yahoo Finance) suggests a segment of the market remains skeptical that this high-spend strategy will yield sustainable operating margins.
4. IS IT WORTH IT AT THIS PRICE?
At 26.1x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, CoStar Group trades at a 36% discount to the peer median of 40.7x (XBRL). The market is pricing in 5.6% long-term growth (CAPM analysis). This valuation makes the stock appear attractively valued, as CoStar has delivered 59 consecutive quarters of double-digit revenue growth (8-K) and currently leads its peer group in TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth. The current price is justified if CoStar can maintain its "subscriber retention" (Risks) while transitioning Homes.com users into paying customers. However, if growth were to slow to 5.0%, the justified multiple would fall to 22.4x (CAPM analysis).
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if operating margins begin to trend toward the peer median (such as CBRE’s 3.9% or DLR’s 12.1%) as the "heavy lifting" of the Homes.com launch concludes (8-K).
- Cautious if residential revenue growth decelerates before the segment reaches operating profitability, suggesting the "fastest growing" claim is stalling.
- Cautious if "cancellation rates" (Risks) spike among the 31,000 agent subscribers, indicating that the premium residential subscription model is failing to provide a return on investment for agents.
6. BOTTOM LINE
Structural Advantage: A massive, proprietary commercial real estate database combined with high switching costs inherent in its subscription-based license agreements. Bottom Line: CoStar Group is a high-growth compounder whose current valuation discount ignores its dominant market position and successful, albeit expensive, residential expansion.
1. Top 5 Material Risks
- Subscriber Retention and Acquisition: CoStar Group’s revenue depends on its ability to keep cancellation rates low and sell new services to existing customers. Failure to do so, driven by economic volatility, inflation, or customer budgetary constraints, directly threatens CoStar Group's primary revenue stream.
- Competitive Pressure and Technological Shifts: CoStar Group operates in a rapidly changing market where competitors may possess greater financial resources, better data, or superior technology. The emergence of AI-powered platforms that bypass CoStar Group’s marketplaces could render its services obsolete, forcing higher R&DR&DResearch & Development — spending on creating new products or technologies and marketing expenses that compress profitability.
- Integration of Acquisitions: CoStar Group’s growth strategy relies on acquisitions, such as the recent Matterport and Domain transactions. Failure to successfully integrate these businesses, manage associated costs, or realize anticipated synergies could lead to impairment charges and negatively impact financial results.
- Search Engine Dependency: A significant portion of traffic to CoStar Group’s websites, including Apartments.com and Homes.com, is driven by internet search engines. Changes to search algorithms or the integration of alternative search features that prioritize other content could reduce site traffic, thereby diminishing the value of advertising and subscription products.
- Indebtedness and Covenant Compliance: CoStar Group carries significant debt, including $1.0 billion in Senior Notes and a 2024 Credit Agreement. Restrictive covenants limit CoStar Group’s ability to incur additional debt, pay dividends, or dispose of assets, and a failure to maintain a total net leverage ratio of 4.50 to 1.00 could trigger a default.
2. Company-Specific Risks
- Infrastructure Capital Expenditures: The ongoing construction of the Richmond, Virginia campus requires significant capital expenditures, which reduces cash available for other corporate uses and could impact CoStar Group's ability to meet debt service obligations.
- Sales Force Productivity: Revenue growth is tied to the effectiveness of the sales force. Shifting personnel to prioritize specific products can lead to decreased productivity in other areas and increased turnover costs.
- Hardware Supply Chain: Through the Matterport acquisition, CoStar Group now relies on a limited number of third-party suppliers for hardware components. Disruptions in this supply chain could prevent CoStar Group from meeting customer demand for hardware products.
- Payment Processing: CoStar Group is subject to risks related to credit and debit card processing. If chargeback or refund rates exceed acceptable levels, processing vendors may increase fees or terminate relationships, impairing CoStar Group's ability to collect revenue.
3. Regulatory/Legal Risks
- Antitrust Litigation: CoStar Group is a defendant in a putative antitrust class action filed on February 20, 2024, alleging that its STR hospitality benchmarking products facilitated price-fixing among hotel operators.
- EU and UK Regulatory Frameworks: CoStar Group faces compliance costs and potential fines of up to 6% of annual worldwide turnover under the Digital Services Act (DSA) and up to 10% under the Online Safety Act (OSA).
- AI Governance: The EU AI Act, which establishes a risk-based governance framework, imposes potential fines of up to 7% of worldwide annual turnover for non-compliance, impacting how CoStar Group develops and commercializes AI-integrated services.
- Data Privacy: CoStar Group is subject to the GDPR and CCPA, which impose strict requirements on the processing of personal information. Non-compliance can lead to regulatory investigations, class action lawsuits, and significant financial penalties.
4. Financial Impact Map
Subscriber Retention and Acquisition → Revenue → Represents the largest portion of total revenue. Competitive Pressure and Technological Shifts → Operating Margins → Downward pressure from increased R&DR&DResearch & Development — spending on creating new products or technologies and marketing investment. Integration of Acquisitions → Goodwill and Intangibles → Approximately $6.7 billion recorded as of December 31, 2025; subject to future impairment charges. Indebtedness and Covenant Compliance → Cash and Cash Equivalents → Debt service obligations and covenant restrictions limit liquidity for other corporate uses. Infrastructure Capital Expenditures → Capital Expenditures → Significant ongoing cash outflows for the Richmond, Virginia campus project.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Apr 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Goldman Sachs cuts CoStar Group price target to $63 from $73
- ▸Goldman Sachs lowers CSGP price target to $63 from $73
- ▸Homes.com February unique visitors down 8% year over year
- ▸Analyst cites softer bookings and revenue visibility uncertainty
- ▸Maintained Buy rating despite near-term growth concerns
- ▸Lower investment spending expected to support EBITDA margin expansion through 2028
CoStar Group price targets trimmed by analysts following Q4 results and Homes.com uncertainty
- ▸Analysts lowered average price target from $65.42 to $64.89 per share
- ▸Activist investors D.E. Shaw and Third Point pressuring board for strategic changes
- ▸Third Point seeking potential divestment or shutdown of Homes.com residential assets
- ▸Concerns cited over reduced segment transparency and paused Homes.com metric disclosures
- ▸Q4 bookings missed investor 'whisper numbers' despite solid core commercial execution
CoStar Group faces activist pressure from D. E. Shaw and Third Point over transparency
- ▸D. E. Shaw and Third Point criticize Homes.com reporting structure
- ▸90-day share price return -36.05%; 1-year total shareholder return -44.58%
- ▸Annual revenue growth 12.46%; net income growth 39.12%
- ▸Estimated intrinsic value $65.42 versus last close of $43.63
- ▸Activist scrutiny focuses on reduced disclosure and Homes.com spending
CoStar Group Q4 Revenue $900M Beats Estimates, Adjusted EPS $0.31 Tops Expectations
- ▸Q4 revenue $900M, exceeded Wall Street estimates
- ▸Q4 adjusted EPS $0.31, beat analyst expectations
- ▸Shares down 53.5% from 52-week high of $97.43
- ▸Stock underperformed XLRE ETF by 42.9% over past 52 weeks
- ▸Consensus rating 'Moderate Buy' with $64.94 mean price target