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CoStar Group (CSGP) to Post Q3 Earnings: What's in Store?
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CoStar Group (CSGP - Free Report) is slated to report third-quarter 2022 earnings on Oct 25.
CoStar expects revenues of $552 million to $557 million, indicating growth of 11%. Non-GAAP earnigs is anticipated between 23 cents and 25 cents per share.
For the third quarter, the Zacks Consensus Estimate for revenues currently stands at $554.97 million, suggesting growth of 11.14% from the year-ago quarter.
The consensus mark for earnings remained unchanged at 24 cents per share over the past 30 days, indicating a decline of 4% from the year-ago quarter.
CoStar’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 18.36%.
Let’s see how things have shaped up for the upcoming announcement:
CoStar Group’s third-quarter performance is likely to have benefited as the company ramped up investments in its residential product strategies. The company is expected to have gained from its solutions like the CoStar lender products, Listing of the Future. These new solutions are expected to have separated CSGP’s product portfolio from its competitors and helped it win market share.
In the second quarter, CoStar Group-owned Apartments.com’s net new sales bookings were up 138% from the year-ago quarter. This was the second-highest quarterly sales ever for Apartments.com, and the trend is expected to have continued in the to-be-reported quarter due to strong demand for its solution, Listing of the Future.
CoStar Group’s third-quarter 2022 performance is expected to have benefited from rising apartment vacancy rates, which will increase property advertising on Apartments.com. This might have impacted CoStar Group’s top-line growth positively.
As vacancy rates are increasing, Apartment.com is also expected to have gained from its Listing of the Future solution, which can provide unit-specific floor plans and availability.
Listing of the Future provides all this information while eliminating time-consuming conversations between prospective renters and property managers. This leads to higher quality leads for each listing and is expected to have contributed to the company’s revenue growth as it has been experiencing more and more traffic on its online platform compared to its competitors like Zillow Group, Inc. (ZG - Free Report) and Redfin Corporation (RDFN - Free Report) .
While Zillow Group and Redfin Corporation have been lowering advertisement spending due to tighter market conditions, CSGP has been increasing investments in advertisements and brand promotions on various social media platforms like Tiktok, Instagram, Snapchat, YouTube and Facebook.
As a result, brand awareness about Apartments.Com has been growing among customers, and property advertising has been increasing on the platform since March. Rising brand awareness and better pricing power amid market volatility might have favored the top line and margins.
However, rising inflation and the recent U.S. Federal Reserve rate hikes are likely to have impacted the company’s top line negatively as demand for property renting might decline as mortgage rates go higher.
Rising inflation has been leading to the underbuilding of new properties relative to demand in the United States. The elevated mortgage rates have been discouraging homebuilders from starting new projects, which has led to a reduction in the number of properties people can actually rent. This might have weighed on the to-be-reported quarter’s performance.
What Our Model Unveils
Our proven model does not predict an earnings beat for CoStar Group this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here.
CoStar Group has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
A Stock to Consider
Here is a company worth considering, as our model shows that it has the right combination of elements to beat on earnings in its upcoming release:
Image: Bigstock
CoStar Group (CSGP) to Post Q3 Earnings: What's in Store?
CoStar Group (CSGP - Free Report) is slated to report third-quarter 2022 earnings on Oct 25.
CoStar expects revenues of $552 million to $557 million, indicating growth of 11%. Non-GAAP earnigs is anticipated between 23 cents and 25 cents per share.
For the third quarter, the Zacks Consensus Estimate for revenues currently stands at $554.97 million, suggesting growth of 11.14% from the year-ago quarter.
The consensus mark for earnings remained unchanged at 24 cents per share over the past 30 days, indicating a decline of 4% from the year-ago quarter.
CoStar’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 18.36%.
Let’s see how things have shaped up for the upcoming announcement:
CoStar Group, Inc. Price and EPS Surprise
CoStar Group, Inc. price-eps-surprise | CoStar Group, Inc. Quote
Factors to Note
CoStar Group’s third-quarter performance is likely to have benefited as the company ramped up investments in its residential product strategies. The company is expected to have gained from its solutions like the CoStar lender products, Listing of the Future. These new solutions are expected to have separated CSGP’s product portfolio from its competitors and helped it win market share.
In the second quarter, CoStar Group-owned Apartments.com’s net new sales bookings were up 138% from the year-ago quarter. This was the second-highest quarterly sales ever for Apartments.com, and the trend is expected to have continued in the to-be-reported quarter due to strong demand for its solution, Listing of the Future.
CoStar Group’s third-quarter 2022 performance is expected to have benefited from rising apartment vacancy rates, which will increase property advertising on Apartments.com. This might have impacted CoStar Group’s top-line growth positively.
As vacancy rates are increasing, Apartment.com is also expected to have gained from its Listing of the Future solution, which can provide unit-specific floor plans and availability.
Listing of the Future provides all this information while eliminating time-consuming conversations between prospective renters and property managers. This leads to higher quality leads for each listing and is expected to have contributed to the company’s revenue growth as it has been experiencing more and more traffic on its online platform compared to its competitors like Zillow Group, Inc. (ZG - Free Report) and Redfin Corporation (RDFN - Free Report) .
While Zillow Group and Redfin Corporation have been lowering advertisement spending due to tighter market conditions, CSGP has been increasing investments in advertisements and brand promotions on various social media platforms like Tiktok, Instagram, Snapchat, YouTube and Facebook.
As a result, brand awareness about Apartments.Com has been growing among customers, and property advertising has been increasing on the platform since March. Rising brand awareness and better pricing power amid market volatility might have favored the top line and margins.
However, rising inflation and the recent U.S. Federal Reserve rate hikes are likely to have impacted the company’s top line negatively as demand for property renting might decline as mortgage rates go higher.
Rising inflation has been leading to the underbuilding of new properties relative to demand in the United States. The elevated mortgage rates have been discouraging homebuilders from starting new projects, which has led to a reduction in the number of properties people can actually rent. This might have weighed on the to-be-reported quarter’s performance.
What Our Model Unveils
Our proven model does not predict an earnings beat for CoStar Group this time around. Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here.
CoStar Group has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
A Stock to Consider
Here is a company worth considering, as our model shows that it has the right combination of elements to beat on earnings in its upcoming release:
ZoomInfo Technologies (ZI - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
ZI’s shares have lost 30% in the year-to-date period compared with the Zacks Computer - Integrated Systems industry’s decline of 12.2%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.