CoStar Group, Inc. Just Recorded A 178% EPS Beat: Here's What Analysts Are Forecasting Next

It's been a good week for CoStar Group, Inc. (NASDAQ:CSGP) shareholders, because the company has just released its latest quarterly results, and the shares gained 3.4% to US$77.84. Revenues were US$678m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.05, an impressive 178% ahead of estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CoStar Group after the latest results.

Check out our latest analysis for CoStar Group

Taking into account the latest results, the consensus forecast from CoStar Group's 16 analysts is for revenues of US$2.75b in 2024. This reflects a credible 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to crater 45% to US$0.29 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$2.77b and earnings per share (EPS) of US$0.30 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target fell 8.0% to US$93.71, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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. There are some variant perceptions on CoStar Group, with the most bullish analyst valuing it at US$107 and the most bearish at US$76.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. 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 2024 is roughly in line with the 14% 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. It's clear that while CoStar Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CoStar Group. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of CoStar Group's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for CoStar Group going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for CoStar Group that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com