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Investing.com - Goldman Sachs has reiterated its Buy rating and $105.00 price target on CoStar Group (NASDAQ:CSGP), a $35.9 billion market cap real estate information provider, following the company’s second-quarter earnings report that exceeded expectations. According to InvestingPro data, the stock is trading near its 52-week high of $86.59, though current valuations suggest the stock may be overvalued.
CoStar reported quarterly results that surpassed both Goldman Sachs estimates and consensus forecasts for revenue, EBITDA margins, and earnings per share. With an impressive gross profit margin of 79.71% and revenue growth of 11.28%, the company also raised its full-year guidance for both revenue and EBITDA margins. For deeper insights into CoStar’s valuation metrics and growth potential, check out the comprehensive Pro Research Report available on InvestingPro.
Net bookings showed significant improvement, reaching $93 million, representing a 65% increase quarter-over-quarter and 39% year-over-year. Apartments.com bookings rose to $45 million from $25 million in the previous quarter, while Homes.com bookings improved to $12 million from negative $4 million.
The company attributed the strong bookings performance to expanded sales forces across both commercial and residential businesses, along with improved sales productivity. Homes.com specifically gained traction, prompting CoStar to raise its full-year residential revenue guidance.
CoStar remains on schedule to complete its previously announced $1.5 billion acquisition of Domain in Australia during the third quarter of 2024.
In other recent news, CoStar Group reported second-quarter revenue of $781 million, surpassing analyst estimates of $772.19 million and marking a 15% increase from the same period last year. Despite the strong revenue performance, adjusted earnings per share were $0.17, slightly below the consensus estimate of $0.14. The company has raised its full-year guidance, which contributed to positive investor sentiment. Analysts at JPMorgan have responded by raising their price target for CoStar Group to $101 from $87, maintaining an Overweight rating due to a favorable growth outlook. Meanwhile, JMP Securities reiterated its Market Outperform rating, emphasizing CoStar’s robust EBITDA margins of 43%. Both firms have highlighted the company’s strong financial health and growth potential. These developments reflect a positive trajectory for CoStar Group, driven by solid revenue growth and strategic guidance adjustments.
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