In a world where real estate decisions can shape entire communities, CoStar Group, Inc. stands as a pivotal force, transforming how professionals access and analyze property data. Renowned for its innovative solutions in commercial real estate analytics, CoStar empowers investors and brokers with cutting-edge tools that redefine market insights. As we delve into the investment landscape surrounding CoStar, I invite you to consider whether its robust fundamentals and market strategies still justify its current valuation and potential for growth.
Table of contents
Company Description
CoStar Group, Inc. is a prominent player in the real estate services sector, founded in 1987 and headquartered in Washington, D.C. The company specializes in providing comprehensive information, analytics, and online marketplace services tailored for the commercial real estate, hospitality, and residential industries across North America, Europe, Asia Pacific, and Latin America. Its core offerings include CoStar Property, a vast inventory of real estate listings, and analytical tools such as CoStar Market Analytics and CoStar Tenant. With a market capitalization of approximately $28.8B, CoStar Group strategically positions itself as an innovator, continually shaping the industry with cutting-edge technologies and insights that empower real estate professionals globally.
Fundamental Analysis
In this section, I will conduct a fundamental analysis of CoStar Group, Inc., focusing on its income statement, financial ratios, and dividend payout policy.
Income Statement
Below is the income statement for CoStar Group, Inc. (CSGP), detailing key financial figures over the last five fiscal years.
| Item | 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 | 572M | 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 |
Over the five-year period, CoStar Group, Inc. has experienced consistent revenue growth, advancing from 1.66B in 2020 to 2.74B in 2024, marking a CAGR of approximately 29%. However, net income has shown volatility, peaking at 375M in 2023 before dropping to 139M in 2024. This decline can be attributed to significant increases in operating expenses, which grew 29% year-over-year. The company faces challenges in maintaining profitability, as reflected in the sharp drop in EPS from 0.92 to 0.34. Investors should remain cautious regarding the sustainability of growth amidst rising costs.
Financial Ratios
The following table summarizes the financial ratios for CoStar Group, Inc. (CSGP) over the last few fiscal years:
| Ratios | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Margin | 13.69% | 15.05% | 16.93% | 15.26% | 5.07% |
| ROE | 8.38% | 8.96% | 9.43% | 9.62% | 2.16% |
| ROIC | 8.22% | 9.49% | 10.03% | 12.39% | 2.35% |
| 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 | 0 | 8.99 | 0.17 |
| Asset Turnover | 0.24 | 0.27 | 0.26 | 0.28 | 0.30 |
| Fixed Asset Turnover | 7.06 | 5.22 | 5.43 | 4.45 | 2.45 |
| Dividend Yield | 0% | 0% | 0% | 0% | 0% |
Interpretation of Financial Ratios
In 2024, CoStar Group’s financial ratios reflect several weaknesses. The net margin dropped significantly to 5.07%, suggesting declining profitability. The P/E ratio has soared to 209.71, indicating that the stock may be overvalued. Additionally, interest coverage has fallen dramatically to 0.17, raising concerns about the company’s ability to meet its debt obligations.
Evolution of Financial Ratios
Over the past five years, CoStar Group’s financial ratios have shown a concerning downward trend in profitability and efficiency metrics, particularly in net margin and interest coverage. While liquidity ratios remain strong, indicating a solid short-term financial position, the rising P/E ratio signals potential overvaluation that investors should monitor closely.
Distribution Policy
CoStar Group, Inc. (CSGP) currently does not pay dividends, reflecting a strategic focus on reinvesting in growth opportunities and research and development. The company is in a high-growth phase, prioritizing expansion over immediate shareholder returns. Despite the absence of dividends, CoStar engages in share buybacks, which can enhance shareholder value by reducing the share count. Overall, this distribution strategy appears aligned with long-term value creation, provided the company’s growth trajectory remains strong and sustainable.
Sector Analysis
CoStar Group, Inc. operates in the Real Estate – Services industry, providing extensive analytics and marketplace services to various real estate sectors. Its competitive advantages stem from a robust database and diverse product offerings.
Strategic Positioning
CoStar Group, Inc. (CSGP) holds a significant position in the commercial real estate data and analytics market, with a market cap of approximately $28.84B. The company’s key products, including CoStar Property and CoStar Market Analytics, dominate their respective segments, providing a competitive edge. However, the sector faces increasing competitive pressure from emerging technologies and new entrants offering innovative data solutions. As a result, CoStar must continually adapt to technological disruptions while maintaining its market share to ensure sustainable growth in this dynamic landscape.
Revenue by Segment
The following chart illustrates CoStar Group, Inc.’s revenue distribution by segment for the fiscal year 2024, showcasing the performance of various business units.
In FY 2024, CoStar Suite continues to dominate with $1.02B, followed by LoopNet at $281.7M and Information Services at $135.9M. Notably, the CoStar Suite has shown significant growth compared to the previous year, indicating its central role in driving overall business performance. However, the Information Services segment has experienced a decline, which may reflect increased competition or market saturation, posing potential risks for future growth. Overall, while the CoStar Suite’s robust performance is promising, the slowdown in certain segments could warrant a cautious approach to investment.
Key Products
Below is a table summarizing the key products offered by CoStar Group, Inc., which are essential for professionals in the commercial real estate and related industries.
| Product | Description |
|---|---|
| CoStar Property | Comprehensive 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, aiding in market analysis. |
| CoStar Market Analytics | Tools to view and report on aggregated market and submarket trends, providing valuable insights for investors. |
| CoStar Tenant | An online B2B prospecting tool that offers detailed tenant information, enhancing leasing opportunities. |
| Lease Comps and Analysis | A systematic tool to capture, manage, and maintain lease data for informed decision-making. |
| CoStar Real Estate Manager | Software solution for lease administration, portfolio management, and lease accounting compliance. |
| CoStar Risk Analytics | Provides risk assessment tools to evaluate potential investment risks in real estate. |
| CoStar Investment | Analytics and insights to support investment decisions in the commercial real estate market. |
| ApartmentFinder.com | A marketing platform for apartment listings that connects renters with rental properties. |
| LoopNet Premium Lister | Enhanced listing service for commercial real estate to increase visibility and attract potential buyers. |
| Ten-X | An online auction platform facilitating the sale of commercial real estate properties. |
CoStar Group, Inc. continues to innovate and expand its offerings, positioning itself as a leader in the real estate information and analytics sector.
Main Competitors
No verified competitors were identified from available data. CoStar Group, Inc. (CSGP) operates in the real estate services sector, and it is estimated to hold a significant market share within its industry, primarily in the United States and expanding into regions like Canada, Europe, and Latin America. The company’s competitive position is strong due to its extensive range of services, including property databases and analytics tools, which cater to various real estate professionals.
Competitive Advantages
CoStar Group, Inc. (CSGP) maintains a strong competitive edge in the real estate services industry through its comprehensive suite of data analytics and online marketplace solutions. With a market cap of $28.84B, the company leverages its extensive databases, including CoStar Property and CoStar COMPS, to provide invaluable insights to real estate professionals. Looking ahead, opportunities lie in expanding its offerings into emerging markets and enhancing its analytical tools to meet evolving customer needs. As the industry shifts towards data-driven decision-making, CoStar’s established reputation positions it well for sustained growth and innovation.
SWOT Analysis
This SWOT analysis aims to evaluate CoStar Group, Inc.’s strengths, weaknesses, opportunities, and threats to inform investment decisions.
Strengths
- Strong market presence
- Diverse service offerings
- Robust data analytics capabilities
Weaknesses
- No dividend distribution
- Relatively high valuation
- Dependence on real estate sector
Opportunities
- Expansion into emerging markets
- Increasing demand for real estate analytics
- Potential partnerships and acquisitions
Threats
- Economic downturns affecting real estate
- Intense competition
- Regulatory challenges in real estate
In summary, CoStar Group, Inc. demonstrates solid strengths that position it well within the real estate analytics sector. However, potential investors should remain cautious of its vulnerabilities and external threats that could impact future growth. A strategic focus on diversifying its market presence and leveraging emerging opportunities could enhance its resilience.
Stock Analysis
Over the past year, CoStar Group, Inc. (CSGP) has experienced significant fluctuations in its stock price, reflecting a bearish trend marked by notable price movements and trading dynamics.
Trend Analysis
Analyzing CoStar Group’s stock performance over the past year reveals a percentage change of -22.2%. This firmly establishes a bearish trend, characterized by deceleration. The stock reached a high of 96.6 and a low of 67.52 during this period, indicating notable price volatility with a standard deviation of 6.94. The recent trend analysis, from August 31, 2025, to November 16, 2025, shows an even sharper decline of -23.96%, with a standard deviation of 8.14, confirming ongoing downward pressure.
Volume Analysis
In the last three months, the average trading volume for CSGP has been approximately 16.44M shares, with a significant portion driven by seller activity, as evidenced by an average sell volume of 11.99M compared to an average buy volume of 4.45M. Despite this seller dominance, the overall volume trend is bullish, with an increasing volume slope of 1.42M, indicating a potential uptick in market participation. However, the buyer volume proportion stands at only 27.08%, suggesting cautious investor sentiment amidst the prevailing bearish trend.
Analyst Opinions
Recent recommendations for CoStar Group, Inc. (CSGP) indicate a cautious stance among analysts. The overall rating stands at C+, with some analysts suggesting a hold position due to mixed financial metrics. For instance, the discounted cash flow and return on assets scores are relatively strong, but the price-to-earnings and price-to-book ratios are concerning. Analysts emphasize the need for improved profitability and growth before considering a buy. As of now, the consensus leans towards a hold rather than a buy or sell for the current year.
Stock Grades
CoStar Group, Inc. (CSGP) has received consistent ratings from several reputable grading companies. Below is a summary of the latest stock grades.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2025-10-09 |
| Citigroup | Maintain | Buy | 2025-07-24 |
| JP Morgan | Maintain | Overweight | 2025-07-23 |
| BMO Capital | Maintain | Market Perform | 2025-07-23 |
| Baird | Maintain | Outperform | 2025-07-23 |
| Needham | Maintain | Buy | 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 |
| RBC Capital | Maintain | Sector Perform | 2025-06-24 |
Overall, the current trend shows a mix of “Buy,” “Overweight,” and “Outperform” ratings, indicating a generally positive outlook among analysts, while a few maintain a more cautious stance with “Sector Perform” and “Underweight” ratings. This reflects a balanced sentiment toward CSGP, suggesting that while some analysts see significant potential, others advise caution.
Target Prices
The consensus target price for CoStar Group, Inc. (CSGP) is firmly set at $105.
| Target High | Target Low | Consensus |
|---|---|---|
| 105 | 105 | 105 |
Analysts are unified in their expectations, indicating a stable outlook for CSGP at the consensus target price of $105.
Consumer Opinions
Consumer sentiment about CoStar Group, Inc. (CSGP) reveals a diverse range of experiences, reflecting both commendable strengths and notable weaknesses.
| Positive Reviews | Negative Reviews |
|---|---|
| “Exceptional data analytics and market insights.” | “Customer service needs significant improvement.” |
| “User-friendly platform with comprehensive tools.” | “High subscription costs compared to competitors.” |
| “Reliable and accurate information for decision-making.” | “Occasional technical glitches disrupt usage.” |
Overall, consumer feedback for CoStar Group highlights its reliable data analytics and user-friendly platform as key strengths, while concerns about customer service and pricing remain recurring weaknesses.
Risk Analysis
In evaluating CoStar Group, Inc. (CSGP), it is essential to understand the various risks that may affect its performance. Below is a table summarizing these risks.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in real estate markets may impact revenue. | High | High |
| Regulatory Risk | Changes in regulations could affect operations. | Medium | High |
| Competition Risk | Increased competition from new entrants could reduce market share. | High | Medium |
| Technology Risk | Reliance on technology may lead to vulnerabilities. | Medium | Medium |
| Economic Risk | Economic downturns could reduce client spending. | Medium | High |
In this analysis, market and economic risks are particularly notable, given recent trends in real estate valuations and economic shifts that can significantly impact CSGP’s operations and earnings.
Should You Buy CoStar Group, Inc.?
CoStar Group, Inc. (CSGP) has a respectable net margin of 5.07% and a return on invested capital (ROIC) of 5.9%, which surpasses its weighted average cost of capital (WACC) of 7.53%. However, the company’s long-term trend is currently bearish, with a significant decline in stock price of approximately 22.2% over the last period. Additionally, the volume analysis shows a seller-dominant market behavior.
Given these factors, I would recommend waiting for a bullish reversal before considering an investment in CoStar Group. The current conditions do not favor a long-term addition to your portfolio, as the long-term trend remains negative and buyer volumes are insufficient.
Specific risks for CoStar Group include increasing competition within the real estate data sector and potential supply chain disruptions that could impact operational efficiency.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- SG Capital Management LLC Purchases New Shares in CoStar Group, Inc. $CSGP – MarketBeat (Nov 16, 2025)
- CSGP – Costar Group Inc Latest Stock News & Market Updates – Stock Titan (Nov 13, 2025)
- CoStar Group, Inc. $CSGP Shares Acquired by National Pension Service – MarketBeat (Nov 16, 2025)
- Some May Be Optimistic About CoStar Group’s (NASDAQ:CSGP) Earnings – Yahoo Finance (Nov 08, 2025)
- Peering Into CoStar Group Inc’s Recent Short Interest – Benzinga (Nov 14, 2025)
For more information about CoStar Group, Inc., please visit the official website: costargroup.com
