"" CoStar Group Stock Maintains $35 Price Target
CoStar Group (NASDAQ:CSGP) has maintained its $35 price target by investment firm Citizens, despite recent revenue concerns. The firm reiterated its Market Outperform rating on the company, citing undervaluation and expanding margins.
Revenue Concerns Weigh on Analysts
CoStar Group's second-quarter financial results showed a slight decline in revenue, leading to a reduction in its full-year revenue guidance. However, the company's EBITDA exceeded expectations, with analysts reacting with adjustments to their ratings and price targets. William Blair downgraded CoStar Group to Market Perform from Outperform, while Needham and Wolfe Research lowered their price targets due to revenue outlook and competitive dynamics.
Citizens' $35 Price Target
Citizens maintained its $35 price target, which is based on approximately 14 times 2027 estimated EBITDA. The firm acknowledged CoStar's Homes.com investments and stated that the company is under-earning today. However, it believes that the valuation can rerate as margins expand and Homes.com becomes a smaller headwind to overall profitability.
Key Metrics
- 79% gross profit margin
- 22% revenue growth
- $1.0 billion estimated EBITDA in 2027
- $780 million to $820 million estimated full-year EBITDA guidance
Insider Buying
CoStar Group's CEO, Andrew Florance, made a significant purchase of $2.5 million worth of shares, acquiring 83,300 shares at $29.89 each. This development indicates a cautious outlook among analysts, despite some positive earnings figures.
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