Last week saw the newest full-year earnings release from CoStar Group, Inc. (NASDAQ:CSGP), an important milestone in the company's journey to build a stronger business. Results were roughly in line with estimates, with revenues of US$2.5b and statutory earnings per share of US$0.92. 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.
Taking into account the latest results, the most recent consensus for CoStar Group from 16 analysts is for revenues of US$2.77b in 2024. If met, it would imply a notable 13% increase on its revenue over the past 12 months. Statutory earnings per share are expected to plunge 65% to US$0.32 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$2.78b and earnings per share (EPS) of US$0.99 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.
The consensus price target held steady at US$90.93, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. The most optimistic CoStar Group analyst has a price target of US$105 per share, while the most pessimistic values it at US$76.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of CoStar Group'shistorical trends, as the 13% annualised revenue growth to the end of 2024 is roughly in line with the 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. The consensus price target held steady at US$90.93, with the latest estimates not enough to have an impact on their price targets.
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..
We also provide an overview of the CoStar Group Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.
