Will CoStar Group Inc’s (NASDAQ:CSGP) Earnings Grow In The Year Ahead?
After CoStar Group Inc’s (NASDAQ:CSGP) earnings announcement in September 2018, analysts seem cautiously optimistic, as a 38% increase in profits is expected in the upcoming year, though this is relatively lower than the past 5-year average earnings growth of 44%. With trailing-twelve-month net income at current levels of US$123m, we should see this rise to US$169m in 2019. In this article, I’ve outline a few earnings growth rates to give you a sense of the market sentiment for CoStar Group in the longer term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.
See our latest analysis for CoStar Group
Exciting times ahead?
Over the next three years, it seems the consensus view of the 11 analysts covering CSGP is skewed towards the positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To reduce the year-on-year volatility of analyst earnings forecast, I’ve inserted a line of best fit through the expected earnings figures to determine the annual growth rate from the slope of the line.
By 2021, CSGP’s earnings should reach US$250m, from current levels of US$123m, resulting in an annual growth rate of 22%. This leads to an EPS of $12.41 in the final year of projections relative to the current EPS of $3.7. In 2021, CSGP’s profit margin will have expanded from 13% to 16%.
Next Steps:
Future outlook is only one aspect when you’re building an investment case for a stock. For CoStar Group, I’ve compiled three pertinent factors you should further research:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is CoStar Group worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether CoStar Group is currently mispriced by the market.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of CoStar Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
