CoStar Group, Inc. reports results for the quarter ended September 30 - Earnings Summary

What happened

CoStar Group reported quarterly adjusted earnings of 38 cents per share, above the 34 cents analysts expected and last year's 23 cents. Revenue rose 14.2% to $952.00 million, beating the $946.19 million estimate. Reported earnings per share were 18 cents, and net income was $74 million.

Confirmed

Global impact / market context

Beating both profit and revenue expectations suggests CoStar is selling more and managing costs better than Wall Street assumed, which supports the case for holding the stock. However, reported earnings of 18 cents were well below adjusted earnings, meaning some costs were excluded from the headline figure.

Analyst inference

CoStar shares had risen 23.0% this quarter but lost 49.9% so far this year. Analysts cut their average earnings estimate by about 9.5% over three months, and the average rating is buy with a $35.00 median price target.

Analyst inference

What to watch

1. CoStar's stock rose 23.0% this quarter but has lost 49.9% so far this year, showing that recent gains follow a much larger decline. Watch whether the earnings beat changes that longer trend. Confirmed
2. The median analyst price target is $35.00, about 3.7% above the last close of $33.70. Watch whether analysts raise targets after this beat, since their average earnings estimate was cut 9.5% over three months. Proposed
3. Reported earnings of 18 cents versus adjusted 38 cents signals large excluded costs, which means the gap between the two figures matters. Watch whether that gap narrows, because a smaller gap would mean cleaner profit from ordinary operations. Analyst inference

Evidence

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