CoStar Group, Inc.
NasdaqGS-CSGP
Company Overview
CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America. It offers CoStar Property that provides inventory of office, industrial, retail, multifamily, hospitality, and student housing properties and land; CoStar COMPS, a robust database of comparable commercial real estate sales transactions; CoStar Market Analytics to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytical tool that provides tenant information. The company also provides Lease Comps and Analysis, a tool to capture, manage, and maintain lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially-zoned parcels; CoStar Real Estate Manager, a real estate lease administration, portfolio management, and lease accounting compliance software solution; and CoStar Risk Analytics and CoStar Investment. In addition, it offers apartment marketing sites, such as ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, WestsideRentals.com, AFTER55.com, CorporateHousing.com, ForRentUniversity.com, Apartamentos.com, and Off Campus Partners; LoopNet Premium Lister; LoopNet Diamond, Platinum, and Gold Ads; LandsofAmerica.com, LandAndFarm.com, and LandWatch.com for rural land for-sale; BizBuySell.com, BizQuest.com, and FindaFranchise.com for operating businesses and franchises for-sale; Ten-X, an online auction platform for commercial real estate; and HomeSnap, an online and mobile software platform, as well as Homes.com, a homes for sale listings site. CoStar Group, Inc. was founded in 1987 and is headquartered in Washington, the District of Columbia.
Name
CoStar Group, Inc.
CEO
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Website
www.costargroup.com
Sector
Real Estate Management and Development
Year Founded
1987
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Bulls Say
A dominant market position has allowed CoStar Suite to maintain high renewal rates and above-inflation price increases, leading to strong revenue growth.
Penetration rates of smaller apartment communities and high-value commercial real estate properties are still quite low on online marketplaces, implying a large addressable market for the multifamily and LoopNet segments.
Much of CoStar’s business model is easily scalable, which should allow operating margins to improve as revenue grows. Residential investments have attractive risk/reward dynamics for the firm.
Bears Say
Emerging threats such as AI and data-sharing arrangements could have the potential to disrupt CoStar’s core business model. Recent multifamily deals among CoStar's competitors will strengthen Zillow's competitive position.
CoStar has a very high-quality business, but its valuation implies market expectations of high revenue growth for many years to come. Failing to live up to the high expectations could lead to a rerating of the stock.
CoStar’s recent foray into the residential marketplace may entail significant marketing investments for many years to come, pressuring margins.