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Investing.com - BMO Capital has reiterated its Market Perform rating and $77.00 price target on CoStar Group (NASDAQ:CSGP), citing improved booking momentum across the company’s business lines. The real estate technology company, currently trading at $81.58 and near its 52-week high of $83.68, shows signs of being overvalued according to InvestingPro’s Fair Value analysis.
BMO Capital noted that CoStar’s salesforce hiring is helping to boost momentum across all major business segments, with Homes.com experiencing improved net new bookings as it moves past mismatched client bookings from 2024. The company, with $2.81B in revenue and impressive 79.71% gross margins, has maintained steady growth with revenue increasing 11.28% over the last twelve months.
Management expressed positive sentiment regarding Apartments.com and CoStar Suite booking trends, highlighting that first-quarter CoStar Suite and LoopNet (NASDAQ:LOOP) bookings reached two-to-three-year highs, though BMO Capital indicated these improvements may take time to flow through to the company’s financial results. For deeper insights into CoStar’s valuation and growth metrics, including 13 additional ProTips, check out the comprehensive Pro Research Report available on InvestingPro.
BMO Capital also observed that recent activist investor activity could potentially lead to a more detailed roadmap for profitability in CoStar’s Residential segment and an enhanced capital return policy.
The real estate information and analytics provider maintains its current price target of $77.00, with BMO Capital continuing to rate the stock as Market Perform.
In other recent news, CoStar Group has announced a definitive agreement to acquire Domain Holdings Australia for A$3.0 billion, which will significantly expand its presence in the Australian property market. The acquisition agreement values Domain at A$4.43 per share and requires approval from Domain shareholders, Australian courts, and regulatory bodies. The Domain Board has recommended shareholders accept the offer, with Nine Entertainment Co. Holdings Limited, a major shareholder, indicating its support.
Additionally, Citizens JMP initiated coverage on CoStar Group with a Market Outperform rating, citing the company’s strong information suite and potential for revenue growth as key factors. The firm believes that CoStar’s profitability will improve, particularly with the potential of its Homes.com platform. On the legal front, a federal judge ruled that CREXi deliberately copied CoStar’s copyrighted photographs, a case that will proceed to trial to determine damages.
BofA Securities resumed coverage of CoStar Group with a Neutral rating, noting the company’s robust growth under CEO Andy Florance but highlighting challenges in scaling its residential segment. Furthermore, CoStar has appointed Alexa-Maria Rathbone Barker as Head of CoStar Europe, where she will lead the company’s expansion efforts in Europe. These developments reflect CoStar’s strategic moves to strengthen its global operations and market position.
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