CoStar Group, Inc. (CSGP) stock analysis

P/E below its 5-year median

CoStar's P/E of 68.8 is below its own 5-year median of 101.0.

P/E above the industry

CoStar's P/E of 68.8 is above the Miscellaneous Business Services median of 25.8.

EV/EBITDA below its 5-year median

CoStar's EV/EBITDA of 22.7 is below its 5-year median of 62.7.

P/B below the industry

CoStar's price-to-book of 1.53 is below the Miscellaneous Business Services median of 2.48.

Trading below fair value

The share price of $30.27 is below our fair value estimate of $33.81.

Margin of safety under 20%

The price is 10.5% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 14.2% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew -72.2% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 791% over the last twelve months, against a 5-year average of -50.1% a year.

Growing faster than the industry

Revenue grew 20.2% over the last twelve months; the Miscellaneous Business Services median is 9.9%.

Guidance lowered

CoStar lowered its 2026 revenue outlook on Jul 28, 2026.

Gross margin slipping

Gross margin was 78.3% over the last twelve months, against 79.3% a year earlier.

Return on equity under 15%

Return on equity was 2.2% over the last twelve months and averaged 3.7% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 2.0%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

CoStar's return on equity of 2.2% is below the Miscellaneous Business Services median of 6.8%.

Earnings shrank over 5 years

Net income shrank 50.1% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 4.9% over the last twelve months, against a 5-year average of 10.5%.

Net margin above the industry

CoStar's net margin of 4.9% is above the Miscellaneous Business Services median of 3.8%.

Low debt

Debt is 12.5% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 18.4% five years ago to 12.5%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 62.1% of total debt.

Interest well covered

Operating income covers interest expense 7.3 times.

Short-term assets cover short-term debts

Current assets are 1.32 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 3.67; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

CoStar has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.