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Investing.com - Needham has raised its price target on CoStar Group (NASDAQ:CSGP) to $105.00 from $98.00 while maintaining a Buy rating following the company’s second-quarter earnings report. The stock currently trades at $85.16, near its 52-week high of $86.59, though InvestingPro analysis suggests the stock is trading above its Fair Value.
CoStar Group’s Q2 results exceeded Street expectations for both revenue and earnings, driven by broad-based strength and the timing of investment spending. The company reported record net new bookings, which increased 65% quarter-over-quarter, while core EBITDA margins reached 43%. With revenue growing at 11.28% and a strong current ratio of 6.01, InvestingPro data reveals the company maintains robust financial health.
For the third quarter, management provided revenue guidance in line with expectations but projected lower margins due to timing of expenses related to sales force expansion efforts. Despite this near-term margin pressure, the company raised its full-year 2025 outlook to reflect the strong second-quarter performance.
Needham expressed bullishness on CoStar shares as the company continues to execute its strategy of digitizing the global real estate industry while generating strong double-digit organic growth and steadily improving EBITDA margins.
The firm raised its estimates alongside the new $105 price target, citing CoStar’s continued strong execution in its core business segments. For deeper insights into CoStar’s valuation and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s financial health and growth potential.
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 previous year’s $678 million. The company’s adjusted earnings per share were $0.17, slightly above the consensus estimate of $0.14. Following these results, CoStar Group raised its full-year guidance for both revenue and EBITDA margins, signaling confidence in its financial outlook. Goldman Sachs reiterated its Buy rating for CoStar Group, maintaining a price target of $105.00, citing the company’s strong earnings performance. JMP Securities also maintained a Market Outperform rating, emphasizing CoStar’s 43% EBITDA margins as a sign of a healthy and profitable core business. Furthermore, JPMorgan increased its price target for CoStar Group to $101.00 from $87.00, highlighting the positive growth outlook after discussions with the company’s management. These developments reflect a strong performance by CoStar Group and continued investor confidence in its future prospects.
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