EUR 850.00 For Business Accounts Only

Morningstar | Costar Company Report

CoStar Group is amid building a real estate services empire, entering the highly competitive apartment rental search market with several acquisitions over the past several years. The key driver continues to be CoStar Suite, which has been the company's backbone during its resilient rise. We believe two initiatives will drive future growth for CoStar: cross-selling between LoopNet and CoStar Suite, and growing its presence in the apartment search market through its multifamily unit. CoStar continues to build its economic moat in the real estate services industry. Through its decades of research and deep investment in providing necessary data to its users, the company is leagues ahead of its small and fragmented competition. The stickiness of its customers, with their 90%-plus renewal rates (closer to 97% for those who have been subscribers for several years), allows management to pass along subtle annual price bumps for its data platform, providing consistent top-line growth. CoStar goes the extra mile to meet with users for training sessions on its platform with the goal of increasing usage per user. We believe the more integrated into and dependent on data tools offered by CoStar the customers are, the less likely they are to discontinue their subscriptions. CoStar’s business is extremely scalable, so we anticipate future international growth as the company applies its rigor to foreign markets, with deep pockets to fund it. We also see the company making more of an effort to expand its target audience. CoStar data is essential to commercial real estate brokers, but we see a future opportunity by deepening its presence with property owners, lenders, and even retailers searching for brick-and-mortar locations.