CSGP - Embedded Expectations Analysis - 2020 07 31
CoStar Group, Inc. (CSGP:USA) currently trades at a historical high relative toUAFRS-based (Uniform) earnings, with a 77.3x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about the potential of Apartments.com, LoopNet revenue, and their growth drivers
Specifically, management may lack confidence in their ability to sustain revenue growth, grow LoopNet revenues going forward, and maintain low cancellation rates. In addition, they may have concerns about the accuracy of their leasing activity estimates for H2, their current customer mix, and the potential benefits of their increased marketing spend for Apartments.com and LoopNet. Furthermore, management may be exaggerating the potential market opportunity of Apartments.com, the macroeconomic resiliency of their business, and the potential of their innovative products to drive growth. Moreover, they may be concerned about the financial position of their clients, softness in their revenue, and their clients halting their purchase of marketing solutions
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.
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