Why CoStar Group (CSGP) Is Up 6.9% After Q2 Revenue Beat and Raised 2025 Guidance And What's Next

• CoStar Group reported second-quarter earnings for the period ended June 30, 2025, with revenue of US$781.3 million, up from US$677.8 million a year earlier, and updated guidance forecasting full-year revenue between US$3.14 billion and US$3.16 billion.
• Despite continued double-digit revenue growth, the company's net income for the second quarter declined significantly year-over-year, reflecting higher expenses or investments impacting profitability.
• We'll examine how CoStar Group's strong revenue growth alongside a notable net income decline shapes its updated investment narrative.

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CoStar Group Investment Narrative Recap

To be a CoStar Group shareholder, you need to believe that consistent double-digit revenue growth and expanding market presence in digital real estate platforms will translate into sustainable long-term earnings, even if near-term profitability is pressured by heavy investments. The company’s recent Q2 earnings reaffirm its robust top-line momentum, but also highlight that the greatest short-term catalyst, continued Homes.com expansion, is balanced by a significant risk: operating expenses rising faster than revenue if user adoption or margins lag. The latest financial news does not materially change this near-term catalyst or the principal risk; it simply reinforces the importance of profitable growth as the company scales residential and international operations.

The most relevant recent announcement is CoStar Group’s updated 2025 full-year guidance, which reiterates expected revenue growth of roughly 15% year-over-year at the midpoint. This aligns with management’s ongoing investments in sales, marketing, and international expansion, sharpening focus on whether incremental revenue gains can offset increased costs in the months ahead.

In contrast, investors should be aware that even strong revenue momentum is not always enough to counteract...

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

CoStar Group's outlook anticipates $4.1 billion in revenue and $670.9 million in earnings by 2028. This reflects a 13.7% annual revenue growth rate and a $553.7 million earnings increase from current earnings of $117.2 million.

Uncover how CoStar Group's forecasts yield a $89.72 fair value, in line with its current price.

Exploring Other Perspectives

The Simply Wall St Community’s fair value estimates for CoStar Group range from US$57.96 to US$139.70, drawn from three individual perspectives. With rising operating expenses pressuring net margins, the potential for profitability challenges remains a focus among many market watchers, consider how these varied viewpoints might impact your own outlook.

Explore 3 other fair value estimates on CoStar Group - why the stock might be worth as much as 54% 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 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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