Morningstar | Increasing Our FVE for CoStar to $357 and Uncertainty Rating to Very High
We recently increased our fair value estimate for CoStar to $357 per share from $316 and increased our uncertainty rating for the company to very high from high. The company has frequently exceeded our and the market's expectations in terms of revenue and earnings growth from acquisitions. CoStar's recent acquisitions for ForRent and LoopNet are both performing well in terms of expense savings, client retention, and cross-selling. However, the company's ability to continue finding value-accretive acquisitions to maintain its historical double-digit revenue and earnings-growth rates leads to greater uncertainty for our valuation.CoStar Group provides information, analytics and online marketplace services to the commercial real estate and related business community through its database of commercial real estate information covering the U.S., the U.K., and parts of Canada, Spain, Germany and France. The company provides online marketplaces for commercial real estate, apartment rentals, lands for sale and businesses for sale. The company operates within two operating segments, North America and International, and its services are distributed to its clients under subscription-based license agreements that renew automatically, a majority of which have a term of one year.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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