Now trading at a price of $82.76, CoStar has moved 0.2% so far today.
Over the last year, CoStar logged a 3.0% change, with its stock price reaching a high of $92.36 and a low of $65.12. Over the same period, the stock underperformed the S&P 500 index by -15.0%. As of April 2023, the company's 50-day average price was $79.04. CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America. Based in Washington, DC, the large-cap Consumer Discretionary company has 5,653 full time employees. CoStar has not offered a dividend during the last year.
Growing Revenues With Increasing Reinvestment in the Business:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $1,192 | $1,400 | $1,659 | $1,944 | $2,182 | $2,388 |
| Revenue Growth | n/a | 17.44% | 18.53% | 17.19% | 12.26% | 9.43% |
| Operating Margins | 24% | 28% | 17% | 22% | 22% | 22% |
| Net Margins | 20% | 23% | 14% | 15% | 17% | 17% |
| Net Income (MM) | $238 | $315 | $227 | $293 | $369 | $403 |
| Earnings Per Share | $0.65 | $0.86 | $0.59 | $0.74 | $0.93 | $0.93 |
| EPS Growth | n/a | 32.31% | -31.4% | 25.42% | 25.68% | 0.0% |
| Diluted Shares (MM) | 364 | 366 | 383 | 394 | 398 | 433 |
| Free Cash Flow (MM) | $306 | $412 | $438 | $346 | $443 | $461 |
| Capital Expenditures (MM) | $30 | $46 | $48 | $124 | $35 | $65 |
| Current Ratio | 7.87 | 5.79 | 11.75 | 11.78 | 13.92 | 13.31 |
| Long Term Debt (MM) | $49 | $46 | $904 | $988 | $989 | $990 |
| Net Debt / EBITDA | -2.91 | -2.17 | -7.02 | -4.96 | -6.37 | -6.68 |
CoStar has growing revenues and increasing reinvestment in the business and low leverage. Additionally, the company's financial statements display decent operating margins with a stable trend and positive EPS growth. Furthermore, CoStar has irregular cash flows.
CoStar's Valuation Is in Line With Its Sector Averages:
CoStar has a trailing twelve month P/E ratio of 79.8, compared to an average of 22.96 for the Consumer Discretionary sector. Based on its EPS guidance of $1.35, the company has a forward P/E ratio of 58.5. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 6.2%. On this basis, the company's PEG ratio is 12.98, which suggests that it is overpriced. Furthermore, CoStar is likely overvalued compared to the book value of its equity, since its P/B ratio of 4.68 is higher than the sector average of 4.24. The company's shares are currently trading 343.3% above their Graham number. In conclusion, CoStar's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
CoStar Has an Average Rating of Buy:
The 12 analysts following CoStar have set target prices ranging from $70.0 to $104.0 per share, for an average of $89.08 with a buy rating. As of April 2023, the company is trading -11.3% away from its average target price, indicating that there is an analyst consensus of some upside potential.
CoStar has a very low short interest because 1.8% of the company's shares are sold short. Institutions own 98.0% of the company's shares, and the insider ownership rate stands at 1.08%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 16% stake in the company is worth $5,372,194,090.
