CoStar Group (CSGP - Free Report) reported second-quarter 2020 adjusted earnings of $2.34 per share that beat the Zacks Consensus Estimate by 14.7%. The figure climbed 4.9% year over year.
Revenues of $397.2 million outpaced the Zacks Consensus Estimate by 1.8% and improved 15.5% year over year.
North America revenues were $384.4 million, up 14.9% year over year. Moreover, international revenues were $12.8 million, up 39.1% year over year.
Markedly, CoStar had 62 million monthly unique visitors on its platforms in the quarter under review, up 13% sequentially.
Information and analytics revenues were $195.6 million, up 12.7% year over year.
CoStar Suite revenues increased 8% year over year to $165.1 million. Information services revenues surged 47% from the year-ago quarter to $30.5 million.
Online Marketplaces revenues increased 18.5% year over year to $201.6 million. Apartments.com grew 21% and LoopNet grew 18% year over year in the second quarter.
Management stated that traffic to Apartments.com and LoopNet marketplaces exceeded pre-coronavirus levels in the reported quarter. Per ComScore, Apartments attracted 23 million average monthly unique visitors, up 6% year over year, and 200 million visits, up 16%.
Multi-family revenues increased 20.8% year over year to $145.5 million. Commercial property and land revenues were $56 million, up 12.8%.
Gross margin expanded 230 basis points (bps) on a year-over-year basis to 81.4%.
Adjusted EBITDA margin of 32.4% expanded 40 bps on a year-over-year basis.
Selling and marketing expenses as a percentage of revenues declined 180 bps from the year-ago quarter to 32.8%.
General and administrative expenses as a percentage of revenues increased 210 bps on a year-over-year basis to 14.5%.
Non-GAAP operating margin contracted 130 bps on a year-over-year basis to 20.5%.
As of Jun 30, CoStar’s cash and cash equivalents (and total marketable securities) were $3.54 billion.
CoStar had long term debt of $745 million as of Jun 30.
For the third quarter of 2020, revenues are expected between $415 million and $420 million, suggesting growth of 18% year over year at mid-point. Adjusted EBITDA is expected in the range of $120-$125 million.
The Zacks Consensus Estimate for revenues is currently pegged at $389.5 million, which indicates growth of 10.4% from the year-ago quarter’s reported figure.
Non-GAAP earnings are expected between $2 and $2.10 per share. The consensus mark is pegged at $2.28 per share, implying a decline of 12.6% from the year-ago quarter’s reported figure.
CoStar reinstated its 2020 guidance. The company currently expects revenues between $1.63 billion and $1.64 billion, suggesting growth of 1% year over year.
The Zacks Consensus Estimate for revenues is currently pegged at $1.58 billion, which indicates growth of 13% from the year-ago quarter’s reported figure.
Ten-X acquisition, completed in second-quarter 2020, is expected to contribute $25-$30 million in revenues.
Adjusted EBITDA is expected in the range of $515-$525 million for 2020, indicating 3% growth at the midpoint of the range compared with 2019.
Non-GAAP earnings are expected between $9.22 and $9.42 per share. The Zacks Consensus Estimate is pegged at $9.24 per share, implying a decline of 9.3% from the year-ago quarter’s reported figure.
Zacks Rank & Stocks to Consider
Currently, CoStar carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader technology sector are Dropbox (DBX - Free Report) , Everbridge (EVBG - Free Report) and Analog Devices (ADI - Free Report) . All the three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Both Dropbox and Everbridge are scheduled to report earnings on Aug 6. Analog Devices is set to release quarterly results on Aug 19.
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