How the REcore Lawsuit Over MLS Data Could Impact CoStar Group's (CSGP) Residential Growth Outlook

• In October 2025, REcore Solutions LLC filed a lawsuit against Homes.com and its parent company, CoStar Group, alleging breach of contract over unpaid MLS data licensing fees, resulting in the planned termination of data feeds to Homes.com and delayed payments to listing brokers.
• This dispute highlights growing concerns about data access rights, broker compensation, and contractual relationships between real estate platforms and MLS data providers, with potential ripple effects across the U.S. residential real estate sector.
• We’ll now explore how the risk of disrupted MLS data access could influence CoStar’s residential growth outlook and future earnings assumptions.

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CoStar Group Investment Narrative Recap

To own shares of CoStar Group, investors generally need to believe in the company's ability to capitalize on the accelerating digitalization of real estate and sustain growth in user engagement and bookings across its platforms, particularly in residential. The recent REcore lawsuit raises some uncertainty around Homes.com's data access and broker relationships, but its short-term impact on the key catalyst, Homes.com's residential market penetration, may not be material unless it signals broader challenges in securing essential data partnerships.

A recent relevant announcement from CoStar is its upcoming Q3 2025 earnings report, with revenue guidance of US$800 million to US$805 million and full-year projections reflecting double-digit top-line growth. This outlook remains anchored in ongoing digital investments and aggressive expansion in the Homes.com platform, reinforcing that near-term performance drivers are closely linked to execution in residential and platform adoption.

In contrast, investors should remain cognizant of potential operating expense risk if rapid expansion in residential fails to translate into expected revenue and margin improvements, especially as data access issues surface…

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

CoStar Group's outlook anticipates revenue of $4.7 billion and earnings of $866.2 million by 2028. This scenario is based on analysts' assumptions of 16.9% annual revenue growth and an increase in earnings of $762 million from current earnings of $104.2 million.

Uncover how CoStar Group's forecasts yield a $97.12 fair value, a 26% upside to its current price.

Exploring Other Perspectives

Three fair value estimates from the Simply Wall St Community range from US$56.57 to US$139.70, illustrating wide differences in individual outlooks. While many expect accelerating digital platform adoption to drive results, uncertainties around data partnerships highlight why a range of views is valuable to consider.

Explore 3 other fair value estimates on CoStar Group - why the stock might be worth as much as 81% more 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 2 key rewards 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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