CoStar Group (NasdaqGS:CSGP) - Share price, News & Analysis

Q: What is the Fair Price of CSGP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

CSGP ($60.34) is trading below our estimate of [[fair value]] ($81.62)

CSGP fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	4/6
Past Performance	5/6
Financial Health	6/6
Dividends	0/6

CSGP Stock Overview

Rewards

Trading at 26.1% below our estimate of its fair value

Earnings are forecast to grow 23.71% per year

Earnings grew by 34.6% over the past year

Risk Analysis

Significant insider selling over the past 3 months

CoStar Group Competitors

Equifax

NYSE:EFX

US$22.6b

Verisk Analytics

NasdaqGS:VRSK

US$26.7b

TransUnion

NYSE:TRU

US$15.3b

Jacobs Engineering Group

NYSE:J

US$16.3b

Price History & Performance

Summary of all time highs, changes and price drops for CoStar Group
Historical stock prices
Current Share Price	US$60.34
52 Week High	US$101.05
52 Week Low	US$49.00
Beta	0.90
1 Month Change	-1.89%
3 Month Change	-11.25%
1 Year Change	-27.55%
3 Year Change	7.68%
5 Year Change	128.91%
Change since IPO	6,467.26%

Recent News & Updates

Jun 29

Is Now An Opportune Moment To Examine CoStar Group, Inc. (NASDAQ:CSGP)?

CoStar Group, Inc. ( NASDAQ:CSGP ) saw a decent share price growth in the teens level on the NASDAQGS over the last few...

Jun 09

CoStar Group: Drastically Overpriced

CoStar Group has done a great job growing in recent years. Strength on its bottom line has been particularly impressive and the long-term outlook for the business is promising. But shares are too pricey right now and don't make sense to consider buying into.

May 06

CoStar Group, Inc.'s (NASDAQ:CSGP) Intrinsic Value Is Potentially 30% Above Its Share Price

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of CoStar Group, Inc...

Shareholder Returns

	CSGP	US Professional Services	US Market
7D	7.6%	2.9%	1.7%
1Y	-27.6%	-17.8%	-20.4%

Return vs Industry: CSGP underperformed the US Professional Services industry which returned -16.1% over the past year.

Return vs Market: CSGP underperformed the US Market which returned -18.8% over the past year.

Price Volatility

Is CSGP's price volatile compared to industry and market?
CSGP volatility
CSGP Average Weekly Movement	6.1%
Professional Services Industry Average Movement	6.5%
Market Average Movement	8.0%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.2%

Stable Share Price: CSGP is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: CSGP's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1987	4,742	Andy Florance	https://www.costargroup.com

CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America. It offers CoStar Property that provides 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; CoStar Market Analytics to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytical tool that provides tenant information. The company also provides Lease Comps and Analysis, a tool to capture, manage, and maintain lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially-zoned parcels; CoStar Real Estate Manager, a real estate lease administration, portfolio management, and lease accounting compliance software solution; and CoStar Risk Analytics and CoStar Investment Analysis that provides market research, consulting and analysis, portfolio and debt analysis, and management and reporting services, as well as STAR Report that offers benchmarking and analytics services for the hospitality industry.

CoStar Group Fundamentals Summary

How do CoStar Group's earnings and revenue compare to its market cap?
CSGP fundamental statistics
Market Cap	US$24.44b
Earnings (TTM)	US$307.67m
Revenue (TTM)	US$2.00b

77.7x

P/E Ratio

11.9x

P/S Ratio

Is CSGP overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CSGP income statement (TTM)
Revenue	US$2.00b
Cost of Revenue	US$363.97m
Gross Profit	US$1.64b
Other Expenses	US$1.33b
Earnings	US$307.67m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Jul 26, 2022

Earnings per share (EPS)	0.78
Gross Margin	81.82%
Net Profit Margin	15.37%
Debt/Equity Ratio	17.0%

How did CSGP perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is CSGP undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for CSGP?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for CSGP. This is calculated by dividing CSGP's market cap by their current preferred multiple.
What is CSGP's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$24.44b

CSGP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	10.8x
Enterprise Value/EBITDA	36.3x
PEG Ratio	3.3x

Price to Earnings Ratio vs Peers

How does CSGP's PE Ratio compare to its peers?

CSGP PE Ratio vs Peers

The above table shows the PE ratio for CSGP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	37.7x
EFX Equifax	28.7x	20.0%	US$22.6b
VRSK Verisk Analytics	26.6x	-10.5%	US$26.7b
TRU TransUnion	52.8x	36.1%	US$15.3b
J Jacobs Engineering Group	42.6x	20.2%	US$16.3b
CSGP CoStar Group	77.7x	23.7%	US$24.4b

Forward PE

Price-To-Earnings vs Peers: CSGP is expensive based on its Price-To-Earnings Ratio (77.7x) compared to the peer average (37.7x).

Price to Earnings Ratio vs Industry

How does CSGP's PE Ratio compare vs other companies in the US Professional Services Industry?

Price-To-Earnings vs Industry: CSGP is expensive based on its Price-To-Earnings Ratio (77.7x) compared to the US Professional Services industry average (15.9x)

Price to Earnings Ratio vs Fair Ratio

What is CSGP's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

CSGP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	77.7x
Fair PE Ratio	40.6x

Price-To-Earnings vs Fair Ratio: CSGP is expensive based on its Price-To-Earnings Ratio (77.7x) compared to the estimated Fair Price-To-Earnings Ratio (40.6x).

Share Price vs Fair Value

What is the Fair Price of CSGP when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: CSGP ($60.34) is trading below our estimate of fair value ($81.62)

Significantly Below Fair Value: CSGP is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: CSGP is poor value based on its PEG Ratio (3.3x)

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Future Growth

How is CoStar Group forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

23.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CSGP's forecast earnings growth (23.7% per year) is above the savings rate (1.9%).

Earnings vs Market: CSGP's earnings (23.7% per year) are forecast to grow faster than the US market (13.8% per year).

High Growth Earnings: CSGP's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: CSGP's revenue (15% per year) is forecast to grow faster than the US market (8.3% per year).

High Growth Revenue: CSGP's revenue (15% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CSGP's Return on Equity is forecast to be low in 3 years time (7.7%).

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Past Performance

How has CoStar Group performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CSGP has high quality earnings.

Growing Profit Margin: CSGP's current net profit margins (15.4%) are higher than last year (13.3%).

Past Earnings Growth Analysis

Earnings Trend: CSGP's earnings have grown by 16% per year over the past 5 years.

Accelerating Growth: CSGP's earnings growth over the past year (34.6%) exceeds its 5-year average (16% per year).

Earnings vs Industry: CSGP earnings growth over the past year (34.6%) exceeded the Professional Services industry 33.1%.

Return on Equity

High ROE: CSGP's Return on Equity (5.3%) is considered low.

Discover strong past performing companies

Financial Health

How is CoStar Group's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CSGP's short term assets ($4.1B) exceed its short term liabilities ($370.2M).

Long Term Liabilities: CSGP's short term assets ($4.1B) exceed its long term liabilities ($1.2B).

Debt to Equity History and Analysis

Debt Level: CSGP has more cash than its total debt.

Reducing Debt: CSGP's debt to equity ratio has reduced from 18.1% to 17% over the past 5 years.

Debt Coverage: CSGP's debt is well covered by operating cash flow (51.9%).

Interest Coverage: CSGP's interest payments on its debt are well covered by EBIT (14.6x coverage).

Balance Sheet

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Dividend

What is CoStar Group current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate CSGP's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate CSGP's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if CSGP's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if CSGP's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as CSGP has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.4yrs

Average management tenure

CEO

Andy Florance (57 yo)

35.42yrs

Tenure

US$22,164,341

Compensation

Mr. Andrew C. Florance, also known as Andy, founded CoStar Group, Inc. in 1987. Mr. Florance serves as the Chief Executive Officer, President and Director at CoStar Group, Inc. He is a frequent speaker on...

CEO Compensation Analysis

Compensation vs Market: Andy's total compensation ($USD22.16M) is above average for companies of similar size in the US market ($USD13.41M).

Compensation vs Earnings: Andy's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: CSGP's management team is considered experienced (4.4 years average tenure).

Board Members

Experienced Board: CSGP's board of directors are seasoned and experienced ( 11.9 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: CSGP insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/28 00:00
End of Day Share Price	2022/06/28 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31