Costar Group, Inc. (NASDAQ: CSGP)

Sector: Real Estate Industry: Real Estate Services CIK: 0001057352
Market Cap 26.47 Bn
P/B 3.07
P/E 1,304.00
P/S 8.66
ROIC (Qtr) -0.56
Div Yield % 0.00
Rev 1y % (Qtr) 20.36
Total Debt (Qtr) 1.18 Bn
Debt/Equity (Qtr) 0.14

About

CoStar Group, Inc., often abbreviated as CSGP, is a prominent player in the real estate industry, specifically in the United States and the United Kingdom. The company's primary business activities revolve around providing online marketplaces for both commercial and residential real estate listings, along with offering valuable information and analytics services to the real estate sector. CoStar's operations span across various business activities. The company operates online marketplaces for commercial and residential real estate, including LoopNet,...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 2.03B provide 71.65x coverage of short-term debt 28.40M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 4.06B provides 3.45x coverage of total debt 1.18B, indicating robust asset backing and low credit risk.
  • Tangible assets of 4.06B provide exceptional 20.14x coverage of deferred revenue 201.60M, showing strong service capability backing.
  • Operating cash flow of 362.50M fully covers other non-current liabilities 74.30M by 4.88x, showing strong long-term stability.
  • Tangible assets of 4.06B provide robust 12.18x coverage of other current liabilities 333.40M, indicating strong asset backing.

Bear case

  • Operating cash flow of 362.50M barely covers its investment activities of (3.10B), with a coverage ratio of -0.12, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (3.10B) provide weak support for R&D spending of 379.30M, which is -8.17x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 2.03B provide limited coverage of acquisition spending of (2.62B), which is -0.78x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 362.50M shows concerning coverage of stock compensation expenses of 174.70M, with a 2.07 ratio indicating potential earnings quality issues.
  • Free cash flow of (37.20M) provides weak coverage of capital expenditures of 399.70M, with a -0.09 ratio suggesting additional external financing needs for growth initiatives.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Real Estate Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CBRE Cbre Group, Inc. 51.14 Bn 41.65 1.30 9.48 Bn
2 CSGP Costar Group, Inc. 26.47 Bn 1,304.00 8.66 1.18 Bn
3 BEKE KE Holdings Inc. 21.08 Bn 43.29 1.45 2.96 Bn
4 JLL Jones Lang Lasalle Inc 16.90 Bn 26.75 0.67 3.48 Bn
5 FSV FirstService Corp 7.01 Bn 56.92 1.78 1.51 Bn
6 COMP Compass, Inc. 6.69 Bn -118.64 1.01 0.48 Bn
7 CIGI Colliers International Group Inc. 5.39 Bn 69.70 2.00 2.50 Bn
8 OPEN Opendoor Technologies Inc. 4.15 Bn -13.09 0.88 1.79 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.21 1.34
EV to Cash from Ops. EV/CFO 65.93 2.97
EV to Debt EV to Debt 20.29 6.15
EV to EBIT EV/EBIT 441.75 5.23
EV to EBITDA EV/EBITDA 140.50 18.71
EV to Free Cash Flow [EV/FCF] EV/FCF -642.44 -9.39
EV to Market Cap EV to Market Cap 0.90 4.27
EV to Revenue EV/Rev 7.82 3.62
Price to Book Value [P/B] P/B 3.07 2.10
Price to Earnings [P/E] P/E 1,304.00 45.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.38
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -6.05
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.42
Interest Coverage Int. cover (Qtr) 0.00 -2.22
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 36.00 -12,525.88
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -58.79 23.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.27
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -88.43 4.69
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -16.37 26.73
EBIT Growth (1y) % EBIT 1y % (Qtr) -79.02 12.80
EBT Growth (1y) % EBT 1y % (Qtr) -79.02 21.27
EPS Growth (1y) % EPS 1y % (Qtr) -88.37 22.42
FCF Growth (1y) % FCF 1y % (Qtr) 79.10 54.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 14.64 39.11
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.28 1.45
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.01
Cash Ratio Cash Ratio (Qtr) 2.64 1.45
Current Ratio Curr Ratio (Qtr) 3.12 2.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.14 -0.06
Interest Cover Ratio Int Coverage (Qtr) 0.00 -2.22
Times Interest Earned Times Interest Earned (Qtr) 0.00 -2.22
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.00 -121.98
EBIT Margin % EBIT Margin % (Qtr) 1.77 -136.76
EBT Margin % EBT Margin % (Qtr) 1.77 -144.54
Gross Margin % Gross Margin % (Qtr) 79.30 32.87
Net Profit Margin % Net Margin % (Qtr) 0.70 -139.89