CoStar Group (NASDAQ:CSGP) Stock Price Breaks Below Fifty Day Moving Average on Analyst Downgrade

Key Points

• CoStar shares fell below their 50-day moving average after JPMorgan cut its price target from $52 to $44; the stock traded as low as $26.86 and closed at $27.54.
• Analyst sentiment is mixed: CoStar has a consensus “Hold” rating and an average price target of $39.11, despite buy ratings from JPMorgan and Needham and multiple recent target reductions.
• Recent results exceeded expectations, with revenue up 14% year over year to approximately $952 million and adjusted EPS of $0.38, but concerns remain about forward guidance, profitability and the $730 million Vexcel acquisition.

CoStar Group, Inc. (NASDAQ:CSGP - Get Free Report) crossed below its 50-day moving average during trading on Wednesday after JPMorgan Chase & Co. lowered their price target on the stock from $52.00 to $44.00. The stock has a 50-day moving average of $30.48 and traded as low as $26.86. JPMorgan Chase & Co. currently has an overweight rating on the stock. CoStar Group shares last traded at $27.54, with a volume of 18,318,858 shares changing hands.

Other equities research analysts have also issued reports about the stock. Needham & Company LLC reiterated a "buy" rating and issued a $40.00 target price on shares of CoStar Group in a report on Wednesday. The Goldman Sachs Group set a $36.00 price objective on shares of CoStar Group in a research report on Wednesday. Keefe, Bruyette & Woods downgraded CoStar Group from an "outperform" rating to a "market perform" rating and dropped their price objective for the stock from $41.00 to $29.00 in a research note on Wednesday, July 29th. William Blair lowered CoStar Group from an "outperform" rating to a "market perform" rating in a report on Wednesday, July 29th. Finally, Robert W. Baird set a $34.00 target price on CoStar Group and gave the company a "neutral" rating in a research note on Tuesday, July 14th. Ten investment analysts have rated the stock with a Buy rating, eight have issued a Hold rating and two have issued a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Hold" and a consensus price target of $39.11.

Insider Buying and Selling

In related news, CEO Andrew C. Florance acquired 83,300 shares of the company's stock in a transaction that occurred on Tuesday, August 4th. The shares were acquired at an average cost of $29.89 per share, for a total transaction of $2,489,837.00. Following the completion of the acquisition, the chief executive officer directly owned 1,806,165 shares in the company, valued at approximately $53,986,271.85. The trade was a 4.83% increase in their position. The purchase was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, CAO Cynthia Cammett Cann sold 4,788 shares of the business's stock in a transaction on Friday, August 7th. The shares were sold at an average price of $30.78, for a total transaction of $147,374.64. Following the completion of the sale, the chief accounting officer directly owned 18,822 shares in the company, valued at $579,341.16. This represents a 20.28% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders own 1.18% of the company's stock.

CoStar Group News Roundup

Here are the key news stories impacting CoStar Group this week:

• Positive Sentiment: Q3 results exceeded expectations. CoStar reported record revenue of approximately $952 million, up 14% year over year, while adjusted EPS of $0.38 surpassed the $0.34 consensus estimate. Adjusted EBITDA reached a record $229 million, roughly doubling from a year earlier, and operating cash flow improved substantially. CoStar Group Q3 Earnings Beat Estimates
• Positive Sentiment: Management raised its outlook. CoStar increased full-year 2026 adjusted EBITDA guidance to $820 million-$840 million and outlined a longer-term target of $1.25 billion in adjusted EBITDA for 2028, supporting the company’s margin-expansion story. CoStar Raises EBITDA Outlook
• Neutral Sentiment: Analyst views remain divided. JPMorgan maintained an overweight rating with a $44 target, while Needham maintained a buy rating with a $40 target. However, Goldman Sachs, BTIG, Baird and Keefe, Bruyette & Woods reduced their price targets; Wells Fargo kept an underweight rating despite raising its target to $26.
• Negative Sentiment: Investors reacted to weaker forward signals. Coverage highlighted concerns about guidance, residential-market profitability and high interest rates. Although revenue and adjusted earnings beat estimates, reported net income and diluted EPS were pressured by comparison with the prior year, increasing doubts about the pace and quality of earnings growth. CoStar Q3 Beats Revenue but Stock Drops on Weak Guidance
• Negative Sentiment: The Vexcel acquisition adds execution and capital-allocation risk. CoStar plans to purchase Vexcel for $730 million in cash to add high-resolution aerial imagery, a potentially valuable enhancement to its property-data platform but a sizable cash commitment that may raise near-term integration concerns. CoStar to Acquire Vexcel

Hedge Funds Weigh In On CoStar Group

A number of large investors have recently added to or reduced their stakes in the company. VIRGINIA RETIREMENT SYSTEMS ET Al bought a new stake in shares of CoStar Group in the third quarter valued at about $4,680,000. D.A. Davidson & CO. grew its holdings in shares of CoStar Group by 10.3% during the third quarter. D.A. Davidson & CO. now owns 31,879 shares of the technology company's stock worth $873,000 after buying an additional 2,988 shares in the last quarter. Redmond Asset Management LLC raised its position in CoStar Group by 134.9% in the 3rd quarter. Redmond Asset Management LLC now owns 37,600 shares of the technology company's stock valued at $1,030,000 after buying an additional 21,592 shares during the last quarter. Motley Fool Asset Management LLC raised its position in CoStar Group by 5.7% in the 3rd quarter. Motley Fool Asset Management LLC now owns 11,462 shares of the technology company's stock valued at $314,000 after buying an additional 615 shares during the last quarter. Finally, Pinnacle Wealth Planning Services Inc. raised its position in CoStar Group by 128.3% in the 3rd quarter. Pinnacle Wealth Planning Services Inc. now owns 2,431 shares of the technology company's stock valued at $67,000 after buying an additional 1,366 shares during the last quarter. Institutional investors own 96.60% of the company's stock.

CoStar Group Price Performance

The stock has a market cap of $11.16 billion, a P/E ratio of 144.95, a PEG ratio of 0.86 and a beta of 0.80. The company has a 50 day simple moving average of $30.48 and a 200 day simple moving average of $37.25. The company has a current ratio of 2.21, a quick ratio of 2.21 and a debt-to-equity ratio of 0.13.

CoStar Group (NASDAQ:CSGP - Get Free Report) last released its quarterly earnings results on Tuesday, October 27th. The technology company reported $0.38 earnings per share for the quarter, topping analysts' consensus estimates of $0.34 by $0.04. The firm had revenue of $952.00 million during the quarter, compared to the consensus estimate of $945.82 million. CoStar Group had a return on equity of 3.74% and a net margin of 2.08%. The business's revenue was up 14.1% on a year-over-year basis. During the same quarter in the prior year, the firm posted $0.23 EPS. Sell-side analysts forecast that CoStar Group, Inc. will post 1.07 earnings per share for the current fiscal year.

CoStar Group Company Profile

CoStar Group, Inc is a provider of information, analytics, and online marketplaces for the commercial and residential real estate industries. The company collects, analyzes, and distributes property and market data to real estate professionals, investors, lenders, and other businesses.

Its brands and services include CoStar, which offers commercial real estate data and research; LoopNet, a marketplace for commercial property listings; Apartments.com, a rental housing marketplace; and Homes.com, a residential real estate platform.

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