The company continues to grow at healthy rates, but they’re not healthy enough for some.
CoStar Group (CSGP 9.87%) stock hit a bump on Hump Day, with its share price diving by nearly 10% across the trading session. The company, which concentrates on real estate tech solutions, was hit with an investor sell-off after releasing its latest set of quarterly figures. That decline was particularly glaring on a day when the S&P 500 index closed flat.
Bottom-line miss
For its third quarter, CoStar’s revenue was $834 million, which was a sturdy 20% higher year over year. That was on the back of a near doubling in net new bookings; these rose by 92% to $84 million.
Image source: Getty Images.
Net income not according to generally accepted accounting principles (GAAP) rose less steeply, advancing by 10% to $97 million. In per-share terms, that non-GAAP (adjusted) bottom line was $0.23.
Unfortunately, analysts tracking the company were expecting it to do better with profitability. As a group, they were collectively estimating it would book an adjusted net profit of $0.18 per share. On a brighter note, CoStar beat on the consensus revenue projection, which was slightly over $812 million.
In the earnings release, the company attributed the improvements to strong performance at what’s arguably its most high-profile asset, the homes.com website.
Today’s Change
(-9.87%) $-7.72
Current Price
$70.51
Key Data Points
Market Cap
$33B
Day’s Range
$63.82 – $72.50
52wk Range
$63.82 – $97.43
Volume
15M
Avg Vol
2.8M
Gross Margin
76.85%
Dividend Yield
N/A
In-line guidance
For the entirety of 2025, CoStar is guiding for adjusted net income of $0.82 to $0.84 per share; the analyst consensus is $0.82. Its revenue projection also sits slightly above the average pundit estimate, at $3.23 billion to $3.24 billion, against the collective forecast of a bit below $3.23 billion.
The company raised its guidance for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in the full year. It’s now anticipating $415 million to $425 million, which is an increase of $40 million at the midpoint of that range.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CoStar Group. The Motley Fool has a disclosure policy.
