These are top 10 stocks traded on the Robinhood UK platform in July
On Wednesday, Citizens JMP analyst Nicholas Jones maintained a Market Outperform rating on CoStar Group (NASDAQ:CSGP) with an unchanged price target of $85.00. CoStar Group’s shares experienced an approximate 5% increase following the announcement of their fourth-quarter results for 2024 and have shown steady performance since, with a year-to-date return of 12.46%.
Jones highlighted CoStar’s robust financial position, noting the company’s solid balance sheet and its ability to generate free cash flow through its core business. According to InvestingPro data, the company maintains more cash than debt and boasts an impressive current ratio of 8.96x, demonstrating strong liquidity. The subscription-based nature of CoStar’s operations provides a buffer against economic downturns, contributing to the stock’s resilience, reflected in its beta of 0.88.Want deeper insights? InvestingPro subscribers have access to over 10 additional exclusive tips and a comprehensive Pro Research Report for CSGP, along with 1,400+ other US stocks.
Despite the positive outlook, CoStar’s current trading level is below its two-year average when evaluating enterprise value to forward EBITDA and sales multiples, though InvestingPro analysis indicates the stock is trading at relatively high valuation multiples with a P/E ratio of 236.85x. The company has demonstrated solid revenue growth of 11.45% and maintains a strong gross profit margin of 79.59%. Jones sees potential for CoStar’s valuation to grow as the company accelerates its hiring within its core commercial business segment. This expansion is expected to drive an increase in net new bookings growth into 2026 and beyond.
The analyst also addressed the impact of Homes.com on CoStar’s stock, describing it as an excessive drag on its share price. However, the reaffirmed price target of $85 is based on an enterprise value to estimated 2026 commercial EBITDA multiple of approximately 25 times.
CoStar Group’s commitment to strengthening its commercial business operations and the anticipated improvement in bookings growth are key factors in Citizen JMP’s optimistic stance on the company’s future performance.
In other recent news, CoStar Group has been the focus of several significant developments. Keefe, Bruyette & Woods maintained their Outperform rating on CoStar Group, citing improvements in corporate governance, including the formation of a capital allocation committee. This committee, comprised of independent directors, aims to ensure disciplined investment strategies, particularly impacting the Homes.com platform. Meanwhile, JMP Securities reiterated a Market Outperform rating, emphasizing CoStar’s strategic focus on increasing net new bookings and investments in its core business, alongside the Homes.com initiative.
Goldman Sachs also maintained a Buy rating with an $85 price target, despite noting a decline in online traffic at Homes.com and Apartments.com. The firm still anticipates a strong compound annual growth rate for residential revenue over the next few years, albeit slower than previously forecasted. CoStar Group recently achieved a legal victory, with Move, Inc. dismissing a trade secrets lawsuit with prejudice. The lawsuit was characterized by CoStar’s CEO as an unsubstantiated attempt to hinder Homes.com’s market growth.
Additionally, CoStar Group announced the appointment of new independent directors and the establishment of a Capital Allocation Committee to evaluate investments and financial targets. The board changes align with CoStar’s commitment to enhancing stockholder value and governance practices. CoStar has entered into support agreements with significant stockholders, ensuring alignment with stockholder value creation, with assistance from financial and legal advisors.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.