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Will CoStar's Earnings & Revenue Beat in Q1 Drive the Stock Price?

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CoStar Group (CSGP - Free Report) reported non-GAAP earnings of 14 cents per share in the first quarter of 2025, which surpassed the Zacks Consensus Estimate by 27.27%. The company registered earnings of 10 cents per share in the year-ago quarter, increasing 40% year over year.

Revenues of $732.2 million beat the Zacks Consensus Estimate by 1.78% and increased 11.5% year over year. This represents the company’s 56th consecutive quarter of double-digit revenue growth. The upside was driven by robust performance in key segments and Matterport Acquisition. In the first quarter of 2025, Matterport acquisition contributed $15.9 million in revenues in the reported quarter., 

CSGP raised its top-line guidance for the second quarter of 2025 based on the first quarter of 2025 results, which bodes well for investors. The company’s shares have also gained 15.5% against the Zacks Computer and Technology sector’s decline of 11.2% in the year-to-date period.

CSGP's earnings beat the Zacks Consensus Estimate in the trailing four quarters, the earnings surprise being 37.41%, on average. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

CoStar Group, Inc. Price, Consensus and EPS Surprise

CoStar Group, Inc. Price, Consensus and EPS Surprise

CoStar Group, Inc. price-consensus-eps-surprise-chart | CoStar Group, Inc. Quote

CSGP’s Top-Line Details

CoStar’s revenues (36.2% of revenues) of $265.1 million beat the consensus estimate by 0.11% and increased 5.9% year over year.

Apartments.com’s revenues increased 11% year over year to $282 million. The Apartments.com network had 38 million average monthly unique visitors in the first quarter of 2025. Net new bookings in the first quarter amounted to $56 million, up 6% sequentially and 29% year over year.

Information Services’ revenues (5.4% of revenues) of $39.8 million beat the consensus mark by 9.64% and increased 20.6% year over year.

Multifamily revenues (38.6% of revenues) of $282.5 million missed the consensus estimate by 0.34% but increased 10.9% year over year.

LoopNet’s revenues (9.9% of revenues) of $72.8 million missed the consensus mark by 0.78% and increased 5.4% year over year.

First-quarter residential revenues (3.7% of revenues) were $27.2 million, which missed the consensus mark by 5.23% and increased 46.2% year over year. In the first quarter of 2025, Homes.com network traffic hit a record of 104 million unique visitors.

Other marketplace revenues (6.1% of revenues) of $44.8 million beat the consensus mark by 51.61% and increased 46.4% year over year.

Per Google Analytics, CoStar’s global websites reached a record 130 million average monthly unique visitors, a 28% increase year over year.

CoStar’s Operating Details

In the reported quarter, selling and marketing expenses increased 0.8% year over year to $368.9 million. As a percentage of revenues, selling and marketing expenses were 50.4% compared with 55.8% in the year-ago quarter.

General and administrative expenses, as a percentage of revenues, expanded 430 basis points (bps) on a year-over-year basis to 19.3%.

Software development expenses, as a percentage of revenues, expanded 40 bps, while Customer base amortization expenses rose 70 basis points year over year.

Adjusted EBITDA was $66 million compared with the year-ago quarter’s $12 million. The adjusted EBITDA margin expanded 710 bps to 9%.

CSGP’s Balance Sheet & Cash Flow Statement

CoStar reported cash and cash equivalents of $3.68 billion as of March.31, 2025, compared with $4.68 billion as of Dec. 31, 2024.

The company had a long-term debt of $992.2 million as of March 31, 2025, compared with $991.9 million as of Dec. 31, 2024.

Cash generated by operating activities was $53.2 million in the reported quarter compared with $393 million in the previous quarter.

CSGP Initiates Q2 & 2025 Guidance

For the second quarter of 2025, the company expects revenues between $770 million and $775 million, indicating year-over-year growth of 14% at the mid-point.

The company anticipates adjusted EBITDA between $50 million and $60 million for the second quarter of 2025.

For 2025, revenues are expected to be between $3.115 billion and $3.155 billion, indicating year-over-year growth of 15% at the mid-point. 

The company anticipates adjusted EBITDA between $355 million and $385 million for 2025.

CSGP’s Zacks Rank & Stocks to Consider

CoStar currently carries a Zacks Rank #3 (Hold).

Affirm (AFRM - Free Report) , Criteo (CRTO - Free Report) and Paycom Software (PAYC - Free Report) are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. AFRM, CRTO and PAYC sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here

Affirm shares have declined 17.2% year to date. AFRM is set to report its third-quarter fiscal 2025 results on May 8.

Criteo shares have lost 12.9% year to date. CRTO is set to report its first-quarter 2025 results on May 2.

Paycom Software shares have gained 11.5% year to date. PAYC is set to report its first-quarter 2025 results on May 7.

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