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.