CoStar Group (CSGP) Faces Zillow Lawsuit Could IP Disputes Reshape Its Competitive Positioning?

• Earlier this month, CoStar Group extended its legal battle by filing a copyright infringement lawsuit against Zillow, alleging unauthorized use and distribution of over 46,000 copyrighted images and seeking damages potentially exceeding US$1 billion.
• This development highlights ongoing competitive and legal tensions within the digital real estate marketplace, raising complex questions about intellectual property protection and industry relationships.
• We'll explore how investor concerns regarding the scale of this lawsuit may influence CoStar Group's current investment outlook and perceived risk profile.

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CoStar Group Investment Narrative Recap

CoStar Group’s investment case rests on the expectation that its expanding suite of data-driven real estate platforms and ongoing adoption in residential markets will deliver sustained top-line growth, despite near-term challenges. The recent lawsuit against Zillow intensifies competitive and legal uncertainty, but as of now, does not materially alter the key short-term catalyst: accelerating Homes.com adoption and monetization. However, it does bring heightened visibility to risks around legal costs and future customer acquisition efficiency.

Among recent announcements, the company’s Q2 2025 results revealed revenue growth to US$781.3 million, but net income declined to US$6.2 million versus the previous year. This suggests that while top-line expansion continues as anticipated, operating leverage remains sensitive, especially if prolonged legal disputes increase expenses or disrupt enterprise momentum. Investors should consider how profit margins may evolve if further litigation or competitive pressure persists...

Read the full narrative on CoStar Group (it's free!)

CoStar Group's outlook anticipates $4.3 billion in revenue and $681.9 million in earnings by 2028. This implies a 13.6% annual revenue growth and a $577.7 million increase in earnings from the current $104.2 million.

Uncover how CoStar Group's forecasts yield a $96.13 fair value, a 7% upside to its current price.

Exploring Other Perspectives

Three diverse fair value estimates from the Simply Wall St Community place CoStar between US$52.97 and US$139.70 per share. While residential market growth remains a key catalyst, investors should recognize that earnings and cost management continue to spark wide debate about the company’s future, explore more viewpoints to see the range of possible outcomes.

Explore 3 other fair value estimates on CoStar Group - why the stock might be worth 41% less than the current price!

Build Your Own CoStar Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your CoStar Group research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.
• Our free CoStar Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate CoStar Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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