As CoStar Group, Inc. (NASDAQ:CSGP) released its earnings announcement on 30 June 2019, analysts seem cautiously bearish, with earnings expected to grow by 15% in the upcoming year against the higher past 5-year average growth rate of 50%. By 2020, we can expect CoStar Group’s bottom line to reach US$274m, a jump from the current trailing-twelve-month of US$238m. I will provide a brief commentary around the figures and analyst expectations in the near term. Readers that are interested in understanding the company beyond these figures should research its fundamentals here.
What can we expect from CoStar Group in the longer term?
Longer term expectations from the 11 analysts covering CSGP’s stock is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To understand the overall trajectory of CSGP’s earnings growth over these next fews years, I’ve fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.
By 2022, CSGP’s earnings should reach US$412m, from current levels of US$238m, resulting in an annual growth rate of 18%. This leads to an EPS of $14.01 in the final year of projections relative to the current EPS of $6.61. With a current profit margin of 20%, this movement will result in a margin of 22% by 2022.
Future outlook is only one aspect when you’re building an investment case for a stock. For CoStar Group, I’ve compiled three important factors you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is CoStar Group worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CoStar Group is currently mispriced by the market.
- Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CoStar Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.