In a world where real estate decisions can make or break fortunes, CoStar Group, Inc. stands as a beacon of innovation and insight. This powerhouse in the real estate services industry revolutionizes how professionals access information and analytics, providing critical tools for investment and property management. With a reputation for unmatched quality and market influence, CoStar’s suite of products—from comprehensive property databases to cutting-edge market analytics—empowers investors and real estate professionals alike. As we delve into an investment analysis, I invite you to consider: do CoStar’s fundamentals still justify its current market valuation and growth trajectory?
Table of contents
Company Description
CoStar Group, Inc. (NASDAQ: CSGP), founded in 1987 and headquartered in Washington, D.C., operates as a leader in the real estate services industry. The company specializes in providing comprehensive information, analytics, and online marketplace services tailored for commercial real estate, hospitality, and residential sectors across North America, Europe, Asia Pacific, and Latin America. Its diverse offerings include CoStar Property, CoStar COMPS, and various marketing platforms like ApartmentFinder.com and LoopNet, catering to both B2B and consumer needs. CoStar’s strategic positioning focuses on leveraging data-driven insights to shape industry trends and enhance decision-making processes, solidifying its role as an innovator in the real estate landscape.
Fundamental Analysis
In this section, I will analyze CoStar Group, Inc.’s fundamental aspects, focusing on its income statement, financial ratios, and dividend payout policy.
Income Statement
The following table presents the Income Statement for CoStar Group, Inc. (CSGP) over the last five fiscal years, highlighting key financial metrics that are essential for assessing the company’s performance.
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 1.66B | 1.94B | 2.18B | 2.46B | 2.74B |
| Cost of Revenue | 309M | 357M | 414M | 492M | 559M |
| Operating Expenses | 1.06B | 1.15B | 1.32B | 1.68B | 2.17B |
| Gross Profit | 1.35B | 1.59B | 1.77B | 1.96B | 2.18B |
| EBITDA | 406M | 571M | 589M | 390M | 152M |
| EBIT | 289M | 432M | 451M | 282M | 4.7M |
| Interest Expense | 17M | 32M | 0 | 31M | 27M |
| Net Income | 227M | 293M | 370M | 375M | 139M |
| EPS | 0.60 | 0.75 | 0.93 | 0.92 | 0.34 |
| Filing Date | 2021-02-24 | 2022-02-23 | 2023-02-22 | 2024-02-22 | 2025-02-20 |
Interpretation of Income Statement
CoStar Group, Inc. has shown consistent revenue growth from 1.66B in 2020 to 2.74B in 2024, indicating a robust demand for its services. However, Net Income has seen significant fluctuations, peaking at 375M in 2023 before dropping to 139M in 2024. This decline suggests increased operating expenses and a reduced EBITDA, revealing potential challenges in maintaining profitability. The EBITDA margin decreased notably, impacting the overall earnings per share (EPS), which fell from 0.92 to 0.34 year-over-year. This performance warrants a cautious approach as we assess future growth prospects and risk management strategies.
Financial Ratios
Below is the financial ratios table for CoStar Group, Inc. (CSGP) over the last few years.
| Metrics | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 13.69% | 15.05% | 16.93% | 15.26% | 5.07% |
| ROE | 4.23% | 5.12% | 5.38% | 5.11% | 1.84% |
| ROIC | 3.66% | 4.51% | 4.25% | 2.48% | 0.04% |
| P/E | 154.94 | 105.93 | 82.88 | 94.53 | 209.71 |
| P/B | 6.55 | 5.43 | 4.46 | 4.83 | 3.85 |
| Current Ratio | 11.75 | 11.78 | 13.92 | 12.01 | 8.96 |
| Quick Ratio | 11.71 | 11.74 | 13.92 | 12.01 | 8.96 |
| D/E | 0.21 | 0.19 | 0.16 | 0.15 | 0.14 |
| Debt-to-Assets | 16.26% | 15.35% | 13.16% | 12.45% | 11.26% |
| Interest Coverage | 16.63 | 13.67 | – | 8.99 | 0.17 |
| Asset Turnover | 0.24 | 0.27 | 0.26 | 0.28 | – |
| Fixed Asset Turnover | 7.06 | 5.22 | 5.43 | 4.45 | – |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Interpretation of Financial Ratios
CoStar Group, Inc. (CSGP) exhibits a robust liquidity position with a current ratio of 8.96 and a quick ratio of 8.96, indicating a strong ability to cover short-term liabilities. However, the solvency ratio stands at 0.167, suggesting potential concerns regarding long-term debt management, as it is relatively low. Profitability margins are also a point of caution; the net profit margin is only 5.07%, which may signal challenges in converting revenue into profit. Efficiency ratios show a receivables turnover of 14.56, indicating good collection practices, yet the inventory turnover is nil, which could reflect inefficiencies in inventory management. Overall, while liquidity is strong, profitability and solvency ratios indicate areas needing improvement.
Evolution of Financial Ratios
Over the past five years, CoStar Group’s ratios have shown a downward trend in profitability margins, with the net profit margin decreasing from 16.93% in 2022 to 5.07% in 2024. Additionally, the solvency ratio has fluctuated, highlighting ongoing challenges in managing debt levels effectively.
Distribution Policy
CoStar Group, Inc. (CSGP) does not pay dividends, reflecting its focus on reinvestment during a high-growth phase. Instead of returning capital to shareholders, the company prioritizes funding research and acquisitions to drive long-term value. Notably, CSGP also engages in share buyback programs, which may enhance shareholder value by reducing share dilution. Overall, this distribution approach aligns with a strategy aimed at sustainable long-term growth, albeit with inherent risks related to market fluctuations and execution effectiveness.
Sector Analysis
CoStar Group, Inc. operates in the Real Estate Services sector, providing comprehensive data and analytics solutions for commercial real estate professionals, competing with firms like Zillow and RealPage.
Strategic Positioning
CoStar Group, Inc. (CSGP) currently holds a significant market share within the commercial real estate analytics sector, characterized by its comprehensive suite of services and tools. With a market cap of approximately $28.8B, it faces competitive pressure from both established players and emerging tech-driven entrants. The company’s ability to leverage data analytics and technology positions it well amidst ongoing technological disruptions. Despite a recent decline in stock price, CoStar’s diverse product offerings, including CoStar Property and Market Analytics, ensure a strong competitive edge. However, I remain cautious of market volatility and evolving industry trends that could impact performance.
Revenue by Segment
The following chart illustrates the revenue distribution across different segments for CoStar Group, Inc. during the fiscal year 2024.
In FY 2024, CoStar Suite remains the dominant revenue driver at 1.02B, reflecting robust growth compared to previous years. However, the Information services segment showed a decline to 136M, indicating potential challenges in that area. LoopNet and Online Marketplaces generated 282M and 130M, respectively, suggesting stable contributions. Notably, while CoStar Suite’s growth trajectory continues to accelerate, the overall diversification of revenue sources faces risks, particularly with the slower performance of Information services, which could impact future margins.
Key Products
CoStar Group, Inc. offers a variety of products tailored to meet the needs of professionals in the commercial real estate industry. Below is a table summarizing some of the key products provided by CoStar:
| Product | Description |
|---|---|
| CoStar Property | An extensive inventory of office, industrial, retail, multifamily, hospitality, and student housing properties as well as land. |
| CoStar COMPS | A robust database of comparable commercial real estate sales transactions that aids in market analysis. |
| CoStar Market Analytics | A tool designed for viewing and reporting on aggregated market and submarket trends to inform investment decisions. |
| CoStar Tenant | An online B2B prospecting and analytical tool providing detailed tenant information for targeted marketing. |
| Lease Comps and Analysis | A specialized tool for capturing, managing, and maintaining lease data to enhance portfolio management. |
| CoStar Real Estate Manager | A comprehensive lease administration, portfolio management, and lease accounting compliance software solution. |
| CoStar Risk Analytics | A tool that helps assess risks associated with real estate investments, aiding in informed decision-making. |
| Ten-X | An online auction platform specifically for commercial real estate transactions. |
| Apartment Marketing Sites | A collection of platforms like ApartmentFinder.com and ForRent.com specifically targeting apartment marketing. |
| LoopNet | A commercial real estate listing service, offering premium listing options for enhanced visibility. |
These products reflect CoStar’s commitment to providing valuable insights and resources for real estate professionals, enabling them to make informed investment decisions.
Main Competitors
The competitive landscape for CoStar Group, Inc. is marked by several significant players within the real estate services sector. Below is a summary of the main competitors, including CoStar Group itself, sorted by market capitalization.
| Company | Market Cap |
|---|---|
| CBRE Group, Inc. | 48.8B |
| Jones Lang LaSalle Incorporated | 15.5B |
| CoStar Group, Inc. | 28.8B |
| Colliers International Group Inc. | 7.2B |
| FirstService Corporation | 7.0B |
| Cushman & Wakefield plc | 3.7B |
| Newmark Group, Inc. | 3.1B |
| Anywhere Real Estate Inc. | 1.6B |
| Marcus & Millichap, Inc. | 1.1B |
These companies operate primarily in the North American and global markets, providing various real estate services and analytics, which puts them in direct competition with CoStar Group in terms of service offerings and market reach.
Competitive Advantages
CoStar Group, Inc. (CSGP) boasts several competitive advantages that position it well in the real estate services industry. Its extensive database and analytics capabilities provide invaluable insights to commercial real estate professionals, which is difficult for competitors to replicate. The company’s diverse portfolio, including platforms for residential and commercial listings, further strengthens its market presence. Looking ahead, CoStar is set to launch new products and expand into emerging markets, capitalizing on the growth of digital real estate solutions. This proactive approach presents significant opportunities for revenue growth and market leadership.
SWOT Analysis
The purpose of this analysis is to evaluate the strengths, weaknesses, opportunities, and threats related to CoStar Group, Inc. (CSGP).
Strengths
- Strong market position
- Diverse service offerings
- Robust data analytics capabilities
Weaknesses
- High dependency on real estate market
- Limited international presence
- No dividends paid
Opportunities
- Expansion into new markets
- Increasing demand for commercial real estate data
- Advancements in technology
Threats
- Intense competition
- Economic downturns
- Regulatory changes in real estate
The overall SWOT assessment indicates that while CoStar Group possesses significant strengths and opportunities, it must also navigate inherent weaknesses and external threats. This suggests a strategic focus on market expansion and innovation to mitigate risks and capitalize on growth potential.
Stock Analysis
Over the past year, CoStar Group, Inc. (CSGP) has experienced significant price movements, culminating in a notable decline that reflects the current trading dynamics.
Trend Analysis
Analyzing the stock’s performance over the past two years, I observe a percentage change of -18.45%. This indicates a bearish trend, as the decline exceeds the -2% threshold. The trend has shown signs of deceleration, with the highest price recorded at 96.6 and the lowest at 67.25. The standard deviation of 7.17 suggests relatively high volatility in the stock’s price movements.
Volume Analysis
In the last three months, total trading volume reached approximately 1.54B shares, with buyer-driven activity accounting for 47.35% of this volume. However, the recent period reflects a seller-dominant environment, with buyer volume at 81.85M and seller volume at 141.94M, indicating a declining trend in buyer participation. This suggests a cautious investor sentiment, as market participation appears to be leaning towards sellers.
Analyst Opinions
Recent analyst recommendations for CoStar Group, Inc. (CSGP) have been mixed, with a consensus leaning towards a hold. Analysts highlight a C+ rating, indicating moderate concerns regarding its price-to-earnings and price-to-book ratios, which scored low at 1. Notable analysts have pointed out that while cash flow metrics are decent, the overall financial health reflects caution. Given these factors, I would suggest monitoring the stock closely rather than rushing into a buy. The consensus for 2025 remains a hold, reflecting uncertainty in the current market conditions.
Stock Grades
CoStar Group, Inc. (CSGP) has received multiple evaluations from established grading firms, reflecting a consistent outlook on its stock performance. Below is a summary of the most recent grades:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | maintain | Underweight | 2025-11-17 |
| RBC Capital | maintain | Sector Perform | 2025-10-09 |
| Citigroup | maintain | Buy | 2025-07-24 |
| Baird | maintain | Outperform | 2025-07-23 |
| Needham | maintain | Buy | 2025-07-23 |
| JP Morgan | maintain | Overweight | 2025-07-23 |
| BMO Capital | maintain | Market Perform | 2025-07-23 |
| RBC Capital | maintain | Sector Perform | 2025-07-23 |
| Keefe, Bruyette & Woods | maintain | Outperform | 2025-07-17 |
| Wells Fargo | maintain | Underweight | 2025-07-16 |
The overall trend indicates a mixed sentiment, with several firms maintaining their grades without significant upgrades or downgrades. Notably, Wells Fargo continues to express caution with an “Underweight” rating, while others like Citigroup and Needham maintain a “Buy” rating, suggesting potential upside for investors.
Target Prices
The consensus among analysts indicates a balanced outlook for CoStar Group, Inc. (CSGP).
| Target High | Target Low | Consensus |
|---|---|---|
| 105 | 60 | 90 |
Overall, analysts expect CSGP to reach a consensus target price of 90, reflecting a moderate optimism towards the company’s performance.
Consumer Opinions
Consumer sentiment towards CoStar Group, Inc. (CSGP) reveals a mixed landscape, showcasing both strong appreciation and notable concerns.
| Positive Reviews | Negative Reviews |
|---|---|
| “Exceptional data accuracy and insight!” | “Customer service needs significant improvement.” |
| “User-friendly platform that saves time.” | “High subscription costs for small businesses.” |
| “Comprehensive market analysis tools.” | “Limited functionality in the mobile app.” |
Overall, feedback indicates that while consumers value CoStar’s data accuracy and user-friendly interface, there are recurring complaints regarding customer service and pricing structure that could deter potential users.
Risk Analysis
In evaluating CoStar Group, Inc. (CSGP), it’s essential to understand the potential risks that could impact its performance. Below is a summary of key risks to consider:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Volatility | Fluctuations in the real estate market could affect demand for CoStar’s services. | High | High |
| Regulatory Changes | New regulations in the real estate sector may impose additional compliance costs. | Medium | Medium |
| Competition | Increased competition from other data analytics firms can pressure market share. | High | High |
| Economic Downturn | A recession could lead to reduced spending in real estate services. | Medium | High |
| Cybersecurity Threats | Data breaches could lead to loss of client trust and potential lawsuits. | Medium | High |
Overall, the most pressing risks for CSGP are market volatility and competitive pressures, both of which can significantly affect revenue. Recent trends indicate heightened competition in the data analytics space, making it crucial to monitor this landscape closely.
Should You Buy CoStar Group, Inc.?
CoStar Group, Inc. (CSGP) reported a net income of 139M for 2024, indicating a positive net margin of 5.06%. The company has created value as its ROIC of 0.035 exceeds its WACC of 0.075, suggesting effective capital utilization. With total debt at 1B and a debt-to-equity ratio of 0.138, CoStar maintains a manageable level of debt. The fundamentals have evolved positively, with significant year-on-year revenue growth of 13.35% and a rating of C+, reflecting moderate performance.
Favorable signals
CoStar Group, Inc. has demonstrated positive revenue growth of 11.45%, alongside a high gross margin of 79.59% and gross profit growth of 10.91%. The company also benefits from a favorable interest expense percentage of 1.0%. Additionally, the debt-to-equity ratio is at a manageable level of 0.14, indicating a relatively low level of debt compared to equity.
Unfavorable signals
However, there are several unfavorable elements to consider. The company has a negative ebit growth of -98.34% and a significant decline in net margin growth of -66.79%. Earnings per share have also decreased by -63.04%. Furthermore, the return on invested capital (ROIC) stands at 4%, which is less than the weighted average cost of capital (WACC) of 7.5%, indicating value destruction. Additionally, the price-to-earnings (PE) ratio is very high at 209.71, suggesting that the stock may be overvalued.
Conclusion
Given the favorable global income statement opinion and the unfavorable global ratios evaluation, it might be prudent to wait for a more favorable trend or for buyers to return, especially considering the recent seller volume exceeds the buyer volume.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Strong Results Lifted CoStar Group. (CSGP) in Q3 – Yahoo Finance (Dec 04, 2025)
- Is CoStar Group Stock Underperforming the Dow? – Barchart.com (Dec 04, 2025)
- TradeLink Capital LLC Acquires Shares of 15,081 CoStar Group, Inc. $CSGP – MarketBeat (Dec 02, 2025)
- Strong Results Lifted CoStar Group. (CSGP) in Q3 – Insider Monkey (Dec 04, 2025)
- CoStar Group To Present at Stephens 27th Annual Investment Conference – Business Wire (Nov 17, 2025)
For more information about CoStar Group, Inc., please visit the official website: costargroup.com
