By Scott Kanowsky
Investing.com -- Shares in CoStar Group Inc (NASDAQ:CSGP) dropped sharply on Wednesday after the U.S. real estate information and services giant unveiled annual guidance that disappointed expectations.
In its latest earnings, the company projected adjusted earnings per share of $0.25 to $0.26 this year on revenue in the range of $575 million to $580M. Bloomberg consensus estimates had seen the bottom-line figure at $0.36 and a top-line number of $585.5M.
Adjusted earnings before interest, tax, depreciation and amortization for 2023 is also seen at between $500M to $520M, which analysts at Stephens noted was a "hefty" 34% below consensus projections.
Speaking to analysts in an earnings call, chief financial officer Scott Wheeler said the company has planned "significant" investments for the year, particularly into expanding its residential business following strong 2022 performance at its Homes.com real estate data portal.
"[T]he marketplace changes quarter-to-quarter, and we see the opportunities or the challenges and we'll adjust appropriately, and we're always looking for where do we minimize investment at the right time so that we are building at pace, but not spending too much," Wheeler added.
Also weighing on CoStar shares was the group's announcement that talks to purchase Realtor.com owner Move Inc. from News Corp. (NASDAQ:NWSA) had ended. If it had been successful, the deal would have given CoStar added firepower in its battle with Zillow Group (NASDAQ:ZG) for dominance in U.S. digital real estate spaces used to buy and sell homes.
Chief executive Andy Florance said in the earnings call that CoStar has seen "other opportunities" in both the commercial and residential markets.