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Investing.com - JMP Securities reiterated its Market Outperform rating and $100.00 price target on CoStar Group (NASDAQ:CSGP) on Wednesday. The company, currently trading at $85.16 with a market capitalization of $35.93 billion, is trading near its 52-week high of $86.59.
The research firm highlighted that CoStar’s Commercial Real Estate Information and Marketplace continues to maintain 43% EBITDA margins, indicating the core business remains healthy and highly profitable. According to InvestingPro data, the company maintains impressive gross margins of nearly 80% and has shown strong revenue growth of 11.28% over the last twelve months.
JMP believes Homes.com investments have peaked as monetization begins to ramp up, positioning the company for significant EBITDA growth in the coming years.
The firm noted that a maturing Homes.com sales force and better distribution of Matterport (NASDAQ:MTTR) will contribute to earnings growth, while the company has shut down a money-losing operation.
JMP also mentioned that a potential improvement in the commercial real estate macro environment could create additional tailwinds for CoStar’s results.
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 $678 million reported in the same quarter last year. Despite this strong revenue growth, the company’s adjusted earnings per share were $0.17, slightly below the consensus estimate of $0.14. Investors reacted positively to the announcement, particularly due to CoStar’s decision to raise its full-year guidance and record bookings performance. Additionally, JPMorgan raised its price target for CoStar Group to $101 from $87, maintaining an Overweight rating on the stock. This 16% increase in the price target was based on the analysis of CoStar’s recent earnings report and discussions with the company’s management. These developments highlight CoStar’s ongoing growth and the positive outlook from analysts.
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