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CoStar Group Inc CSGP

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Record-Low Apartment Vacancies Create Headwinds for CoStar's Growth in the Third Quarter

Kevin Brown, CFA Equity Analyst

Analyst Note

| Kevin Brown, CFA |

Wide-moat CoStar Group reported third-quarter earnings results that were largely in line with our estimates, leading us to reaffirm our $84 fair value estimate. Revenue increased 17% year over year to $499, in line with our estimate of 18% growth and a 4% improvement over the second quarter of 2021. Adjusted EBITDA was up 7% year over year to $144, though the third quarter represents the third straight quarter of quarter-over-quarter declines to adjusted EBITDA with a 4% decline compared with the second quarter of 2021. As a result, normalized net income was up 11% year over year to $99 but down 4% compared with the prior quarter.

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Company Profile

Business Description

CoStar Group is a leading provider of commercial real estate data and marketplace listing platforms. Its data offering contains in-depth analytical information on over 5 million commercial real estate properties related to various subsectors including office, retail, multifamily, healthcare, industrial, self-storage, and data centers. It operates five flagship brands: CoStar Suite, LoopNet,, BizBuySell, and LandsofAmerica with approximately three quarters of its revenue classified as subscription based. The company has also recently expanded its presence in Canada, the United Kingdom, Spain, and France.

1331 L Street
Northwest, WA, 20005
T +1 202 346-6500
Sector Real Estate
Industry Real Estate Services
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 4,752