Earnings Beat: CoStar Group, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
In This Article:
CoStar Group, Inc. (NASDAQ:CSGP) shareholders are probably feeling a little disappointed, since its shares fell 6.0% to US$74.48 in the week after its latest quarterly results. It looks like a credible result overall - although revenues of US$693m were what the analysts expected, CoStar Group surprised by delivering a (statutory) profit of US$0.13 per share, an impressive 67% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Check out our latest analysis for CoStar Group
Taking into account the latest results, the most recent consensus for CoStar Group from 14 analysts is for revenues of US$3.08b in 2025. If met, it would imply a solid 16% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 81% to US$0.78. In the lead-up to this report, the analysts had been modelling revenues of US$3.15b and earnings per share (EPS) of US$0.87 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.
The analysts made no major changes to their price target of US$90.08, suggesting the downgrades are not expected to have a long-term impact on CoStar Group's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic CoStar Group analyst has a price target of US$103 per share, while the most pessimistic values it at US$75.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CoStar Group's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of CoStar Group'shistorical trends, as the 12% annualised revenue growth to the end of 2025 is roughly in line with the 13% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 11% per year. So although CoStar Group is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.