CoStar Group, Inc. (NASDAQ:CSGP) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 2.0% to hit US$426m. CoStar Group also reported a statutory profit of US$1.48, which was an impressive 32% above what the analysts had 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the twelve analysts covering CoStar Group are now predicting revenues of US$1.89b in 2021. If met, this would reflect a decent 19% improvement in sales compared to the last 12 months. Per-share earnings are expected to grow 19% to US$8.91. Before this earnings report, the analysts had been forecasting revenues of US$1.88b and earnings per share (EPS) of US$8.79 in 2021. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The consensus price target rose 6.0% to US$927despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of CoStar Group's earnings by assigning a price premium. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on CoStar Group, with the most bullish analyst valuing it at US$1,000 and the most bearish at US$638 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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 next year's 19% revenue growth is roughly in line with 17% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 7.7% per year. So it's pretty clear that CoStar Group is forecast to grow substantially faster than its industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for CoStar Group going out to 2024, and you can see them free on our platform here..
Plus, you should also learn about the 2 warning signs we've spotted with CoStar Group .
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