CSGP
CoStar Group, Inc.$48.91
Sell
Target $36.42
Report: Mar 09, 2026Real Estate • Real Estate - Services • Early-Stage HypergrowthSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$48.91-25.5%
Rec: SellConviction: Low
Entry Target
N/A
N/A
Fair Value
$36.42
(26% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$97.43
52 Week Low$39.18
Avg. 3 Month Volume6.89M
Efficiency
LTM Gross Margin78.9%
LTM EBITDA Margin9.9%
LTM EBIT Margin0.9%
LTM Operating Margin-2.2%
LTM ROA0.1%
LTM ROE0.1%
LTM ROIC1.2%
LTM ROCE0.3%
Capital Structure
Market Cap (MM)$16.9B
Enterprise Value (MM)$16.4B
Shares Outstanding417.10M
Total Debt (MM)$1.18B
Cash & Equivalents (MM)$1.73B
LTM Net Debt (MM)$-549.00M
LTM Net Debt/EBITDA-1.7x
Growth
TTM Rev. Growth18.7%
Last 3-Yr Rev. CAGR14.2%
Last 3-Yr EBITDA CAGR-20.0%
Last 3-Yr EPS CAGR-77.9%
Valuation
Street Target Price$67.78
LTM EV/Revenue5.0x
LTM EV/Gross Profit6.4x
LTM EV/EBIT546.2x
LTM EV/EBITDA50.7x
LTM P/E2419.2x
LTM EV/FCF399.6x
LTM P/FCF413.0x
LTM P/TB4.4x
LTM P/B2.0x
Dividend Yield0.0%
Payout Ratio0.0%
Executive SummarySituation: Current price is $48.91 versus fair value $36.42 (-25.5% expected return), and valuation confidence is stable. Debate: Bull case depends on Residential Margin Inflection: The first quarter where residential operating margins show a sequential improvement of >200 basis points. Bear case centers on Execution Failure in Residential: The inability to capture significant market share from Zillow despite massive marketing spend, leading to a 'permanent' margin impairment. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
CoStar's proprietary data moat is widening, evidenced by a gross margin that exceeds the peer median by 43.8 percentage points. The rapid adoption of AI Smart Search and Matterport integration (40x more views for 3D listings) could accelerate Homes.com to category dominance.
Bear Case
Operating margins have collapsed to -2.2% as SG&A costs outpace revenue growth. The residential pivot faces insurmountable competition from Zillow, and the company's 0.2% net margin provides no room for execution errors.
Key Catalysts
Mid-Term (6-18 months)Impact: Critical
Residential Margin Inflection: The first quarter where residential operating margins show a sequential improvement of >200 basis points. Thi...
Near-Term (0-6 months)Impact: High
Activist Escalation: A formal proxy fight or demand for a strategic review by Third Point or D.E. Shaw. This would likely put a floor on the...
Long-Term (18+ months)Impact: Moderate
CoStar is at a critical juncture following its FY2025 earnings collapse and the subsequent 8.89% price decline, making the current valuation...
Primary Risks
Concern: High
Execution Failure in Residential: The inability to capture significant market share from Zillow despite massive marketing spend, leading to...
Concern: Medium
Antitrust and Legal Exposure: The revived antitrust counterclaim from CREXi alleging exclusionary contracts could lead to significant fines...
Concern: Medium
The governance environment is in transition. We outline the following Governance Outcome Tree: 1. Status Quo: Florance continues the residen...
Recent Activity
2026-02-25SEC Filing (8-K)
-8.89%CoStar Group reports FY2025 revenue of $3.2B (up 19%), net income of $7M, and announces $700M share repurchase program for 2026
2026-01-07SEC Filing (8-K)
-8.24%CoStar Group provides 2026 outlook with significant EBITDA expansion and new $1.5B share repurchase program
2025-10-29SEC Filing (8-K)
-9.87%CoStar Group reports Q3 2025 revenue of $834M (up 20%), net loss of $31M, and raises full-year guidance
2025-07-23SEC Filing (8-K)
+6.86%CoStar Group reports Q2 2025 revenue of $781 million, up 15% year-over-year, with record net new bookings
2025-04-30SEC Filing (8-K)
-10.31%CoStar Group reports Q1 2025 results with 12% revenue growth and strong net new bookings
Valuation Table
9.8/10Decision Grade
Scenario Range
$25
Bear
$49
Base
$67
Bull
$49