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Why Is CoStar (CSGP) Down 5.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for CoStar Group (CSGP - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CoStar due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CoStar Group Q1 Earnings Beat Estimates, Revenues Up Y/Y
CoStar Group reported non-GAAP earnings of 23 cents per share in the first quarter of 2026, which surpassed the Zacks Consensus Estimate by 30.16%. The company reported earnings of 15 cents per share in the year-ago quarter, up 64.3% year over year.
Revenues of $897 million rose 22.5% year over year, missing the Zacks Consensus Estimate by 0.06%.
The quarter featured sharp profitability improvement, supported by cost efficiencies and strong performance across its real estate marketplaces. Annualized net new bookings were $67 million, up 20% from the year-ago period.
CoStar Sees Residential Growth Outpacing CRE
CoStar Group reported balanced growth across its two operating segments, with Residential Real Estate continuing to expand faster than the Commercial Real Estate portfolio. Commercial Real Estate revenue (52.6% of revenues) was $472 million, up 15.4% year over year, while Residential Real Estate revenue (47.4% of revenues) was $425 million, up 31.6% year over year.
Within Commercial Real Estate, CoStar Group’s revenues (36.9% of revenues) were $331, which increased 8.5% year over year. LoopNet’s revenues (9.5% of revenues) were $85 million, which increased 16.4% year over year. Other Commercial Real Estate revenues (6.2% of revenues) were $56 million, which increased 80.6% year over year, aided by contributions from acquired operations.
CSGP Leans on AI and Marketplaces to Drive Engagement
In the first quarter of 2026, the company highlighted the launch of the Homes.com AI application and pointed to stronger consumer interaction metrics tied to AI-driven search experiences, alongside ongoing progress in member growth for Homes.com.
In the reported quarter, CSGP continued product enhancements at Apartments.com, including expanded natural-language and voice-search capabilities, and highlighted pricing and inventory initiatives at LoopNet designed to broaden advertiser participation. These initiatives collectively reinforce CoStar Group’s strategy of pairing marketplace scale with technology-led differentiation to support sustained growth and expanding profitability.
CSGP Delivers Operating Leverage as EBITDA Doubles
In the reported quarter, selling and marketing expenses increased 14.1% year over year to $421 million. As a percentage of revenues, selling and marketing expenses were 46.9% compared with 50.4% in the year-ago quarter. General and administrative expenses, as a percentage of revenues, contracted 520 basis points (bps) on a year-over-year basis to 14%.
Software development expenses, as a percentage of revenues, expanded 30 bps, while Customer base amortization expenses rose 180 bps year over year. Operating expenses increased 12.2% year over year to $698 million. As a percentage of revenues, operating expenses decreased 720 bps year over year to 77.8%.
Adjusted EBITDA was $132 million compared with the year-ago quarter’s $66 million. The adjusted EBITDA margin expanded 570 bps to 14.7%.
CSGP’s Balance Sheet & Cash Flow Statement
CoStar Group reported cash and cash equivalents of $1.21 billion as of March 31, 2026, compared with $1.63 billion as of Dec. 31, 2025.
The company had a long-term debt of $994 million as of March. 31, 2026, compared with $993 million as of Dec. 31, 2025.
Cash generated by operating activities was $152 million in the reported quarter compared with $430 million in the previous quarter.
In the first quarter of 2026, CoStar Group repurchased 11.4 million shares for $505 million, with most of this executed through an accelerated share repurchase plan.
CoStar Group’s Outlook
Management reaffirmed 2026 revenue guidance of $3.78-$3.82 billion, implying continued double-digit growth at the midpoint. Adjusted EBITDA guidance for 2026 increased to $780-$820 million, representing a higher margin profile than previously expected.
For the second quarter of 2026, the company expects revenues between $922 million and $932 million. Adjusted EBITDA is expected to be in the range of $160-$180 million, with adjusted earnings per share anticipated to be in the range of 27 cents to 30 cents per share, signaling further sequential improvement in profitability.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 14.55% due to these changes.
VGM Scores
Currently, CoStar has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, CoStar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CoStar belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, ServiceNow (NOW - Free Report) , has gained 14.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
ServiceNow reported revenues of $3.77 billion in the last reported quarter, representing a year-over-year change of +22.1%. EPS of $0.97 for the same period compares with $0.81 a year ago.
For the current quarter, ServiceNow is expected to post earnings of $0.86 per share, indicating a change of +4.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
ServiceNow has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is CoStar (CSGP) Down 5.3% Since Last Earnings Report?
It has been about a month since the last earnings report for CoStar Group (CSGP - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is CoStar due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
CoStar Group Q1 Earnings Beat Estimates, Revenues Up Y/Y
CoStar Group reported non-GAAP earnings of 23 cents per share in the first quarter of 2026, which surpassed the Zacks Consensus Estimate by 30.16%. The company reported earnings of 15 cents per share in the year-ago quarter, up 64.3% year over year.
Revenues of $897 million rose 22.5% year over year, missing the Zacks Consensus Estimate by 0.06%.
The quarter featured sharp profitability improvement, supported by cost efficiencies and strong performance across its real estate marketplaces. Annualized net new bookings were $67 million, up 20% from the year-ago period.
CoStar Sees Residential Growth Outpacing CRE
CoStar Group reported balanced growth across its two operating segments, with Residential Real Estate continuing to expand faster than the Commercial Real Estate portfolio. Commercial Real Estate revenue (52.6% of revenues) was $472 million, up 15.4% year over year, while Residential Real Estate revenue (47.4% of revenues) was $425 million, up 31.6% year over year.
Within Commercial Real Estate, CoStar Group’s revenues (36.9% of revenues) were $331, which increased 8.5% year over year. LoopNet’s revenues (9.5% of revenues) were $85 million, which increased 16.4% year over year. Other Commercial Real Estate revenues (6.2% of revenues) were $56 million, which increased 80.6% year over year, aided by contributions from acquired operations.
CSGP Leans on AI and Marketplaces to Drive Engagement
In the first quarter of 2026, the company highlighted the launch of the Homes.com AI application and pointed to stronger consumer interaction metrics tied to AI-driven search experiences, alongside ongoing progress in member growth for Homes.com.
In the reported quarter, CSGP continued product enhancements at Apartments.com, including expanded natural-language and voice-search capabilities, and highlighted pricing and inventory initiatives at LoopNet designed to broaden advertiser participation. These initiatives collectively reinforce CoStar Group’s strategy of pairing marketplace scale with technology-led differentiation to support sustained growth and expanding profitability.
CSGP Delivers Operating Leverage as EBITDA Doubles
In the reported quarter, selling and marketing expenses increased 14.1% year over year to $421 million. As a percentage of revenues, selling and marketing expenses were 46.9% compared with 50.4% in the year-ago quarter. General and administrative expenses, as a percentage of revenues, contracted 520 basis points (bps) on a year-over-year basis to 14%.
Software development expenses, as a percentage of revenues, expanded 30 bps, while Customer base amortization expenses rose 180 bps year over year.
Operating expenses increased 12.2% year over year to $698 million. As a percentage of revenues, operating expenses decreased 720 bps year over year to 77.8%.
Adjusted EBITDA was $132 million compared with the year-ago quarter’s $66 million. The adjusted EBITDA margin expanded 570 bps to 14.7%.
CSGP’s Balance Sheet & Cash Flow Statement
CoStar Group reported cash and cash equivalents of $1.21 billion as of March 31, 2026, compared with $1.63 billion as of Dec. 31, 2025.
The company had a long-term debt of $994 million as of March. 31, 2026, compared with $993 million as of Dec. 31, 2025.
Cash generated by operating activities was $152 million in the reported quarter compared with $430 million in the previous quarter.
In the first quarter of 2026, CoStar Group repurchased 11.4 million shares for $505 million, with most of this executed through an accelerated share repurchase plan.
CoStar Group’s Outlook
Management reaffirmed 2026 revenue guidance of $3.78-$3.82 billion, implying continued double-digit growth at the midpoint. Adjusted EBITDA guidance for 2026 increased to $780-$820 million, representing a higher margin profile than previously expected.
For the second quarter of 2026, the company expects revenues between $922 million and $932 million. Adjusted EBITDA is expected to be in the range of $160-$180 million, with adjusted earnings per share anticipated to be in the range of 27 cents to 30 cents per share, signaling further sequential improvement in profitability.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 14.55% due to these changes.
VGM Scores
Currently, CoStar has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock has a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, CoStar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
CoStar belongs to the Zacks Computers - IT Services industry. Another stock from the same industry, ServiceNow (NOW - Free Report) , has gained 14.9% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.
ServiceNow reported revenues of $3.77 billion in the last reported quarter, representing a year-over-year change of +22.1%. EPS of $0.97 for the same period compares with $0.81 a year ago.
For the current quarter, ServiceNow is expected to post earnings of $0.86 per share, indicating a change of +4.9% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
ServiceNow has a Zacks Rank #4 (Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.