CoStar Group, Inc. (NASDAQ:CSGP) Just Released Its Full-Year Results And Analysts Are Updating Their Estimates
Last week saw the newest annual earnings release from CoStar Group, Inc. (NASDAQ:CSGP), an important milestone in the company's journey to build a stronger business. CoStar Group reported in line with analyst predictions, delivering revenues of US$2.5b and statutory earnings per share of US$0.92, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for CoStar Group
Taking into account the latest results, the current consensus from CoStar Group's 16 analysts is for revenues of US$2.77b in 2024. This would reflect a notable 13% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to plummet 65% to US$0.32 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$2.78b and earnings per share (EPS) of US$0.99 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a large cut to EPS estimates.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$90.93, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on CoStar Group, with the most bullish analyst valuing it at US$105 and the most bearish at US$76.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 13% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.9% annually. So it's pretty clear that CoStar Group is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on CoStar Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for CoStar Group going out to 2026, and you can see them free on our platform here..
You can also see our analysis of CoStar Group's Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
