CoStar (CSGP) Down 7.5% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for CoStar Group (CSGP). Shares have lost about 7.5% 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 latest earnings report in order to get a better handle on the important drivers.

CoStar Q4 Earnings Beat Estimates, Revenues Up Y/Y

CoStar Group reported non-GAAP earnings of 31 cents per share in the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate by 13.76%. The company reported earnings of 26 cents per share in the year-ago quarter, up 19.2% year over year.

Revenues of $900 million beat the Zacks Consensus Estimate by 1% and increased 26.9% year over year. This represents the company’s 59th consecutive quarter of double-digit revenue growth. The upside was driven by robust performance in key segments.

CSGP’s Quarter Details

During the fourth quarter of 2025, the company changed the composition of segments from geography-based to product portfolio-based. In the fourth quarter of 2025, Commercial Real Estate revenues (52.3% of revenues) were $471 million. The Commercial Real Estate segment includes CoStar, LoopNet, and Other Commercial Real Estate.

CoStar’s revenues (36.1% of revenues) were $325, which increased 9.4% year over year.

LoopNet’s revenues (9.3% of revenues) were $84 million, which increased 16.7% year over year.

Other Commercial Real Estate revenues (6.9% of revenues) were $62 million, which increased 181.8% year over year.

Fourth-quarter Residential revenues (47.7% of revenues) were $429 million, which increased 34.9% year over year.

In the fourth quarter of 2025, Net New Bookings reached $75 million, which represents a year-over-year increase of 41.5%. In 2025, Net New Bookings reached $308 million, which represents a year-over-year increase of 23.2%.

In the reported quarter, CoStar’s sites reached 139 million average monthly unique visitors, while the Homes.com Network achieved 108 million.

CoStar’s Operating Details

In the reported quarter, selling and marketing expenses increased 22.3% year over year to $378 million. As a percentage of revenues, selling and marketing expenses were 42% compared with 43.6% in the year-ago quarter.

General and administrative expenses, as a percentage of revenues, contracted 330 basis points (bps) on a year-over-year basis to 14.3%.

Software development expenses, as a percentage of revenues, expanded 50 bps, while Customer base amortization expenses rose 280 bps year over year.

Operating expenses increased 24.4% year over year to $658 million. As a percentage of revenues, operating expenses decreased 150 bps year over year to 73.1%.

Adjusted EBITDA was $177 million compared with the year-ago quarter’s $112 million. The adjusted EBITDA margin expanded 390 bps to 19.7%.

CSGP’s Balance Sheet & Cash Flow Statement

CoStar reported cash and cash equivalents of $1.63 billion as of Dec. 31, 2025, compared with $1.93 billion as of Sept. 30, 2025.

The company had a long-term debt of $993 million as of Dec. 31, 2025, compared with $992.9 million as of Sept. 30.

Cash generated by operating activities was $430 million in the reported quarter compared with $267.9 million in the previous quarter.

In the fourth quarter of 2025, the company completed a $500 million share repurchase program, which was initiated in 2025.

CSGP Initiates Positive Q1 & 2026 Guidance

For the first quarter of 2026, the company expects revenues between $890 million and $900 million, indicating year-over-year growth of 22% to 23%.

The company anticipates adjusted EBITDA between $95 million and $115 million for the first quarter of 2026.

CSGP expects first-quarter non-GAAP earnings per share between 16 cents and 19 cents.

For 2026, revenues are expected to be between $3.78 billion and $3.82 billion, indicating year-over-year growth of 16% to 18%.

The company anticipates adjusted EBITDA between $740 million and $800 million for 2026.

CSGP expects 2026 non-GAAP earnings per share between $1.22 per share and $1.33 per share.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates revision.

The consensus estimate has shifted -42.34% due to these changes.

VGM Scores

At this time, CoStar has a average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, the stock has a score of D on the value side, putting it in the bottom 40% for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. 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 is part of the Zacks Computers - IT Services industry. Over the past month, Vertiv Holdings Co. (VRT), a stock from the same industry, has gained 5.3%. The company reported its results for the quarter ended December 2025 more than a month ago.

Vertiv reported revenues of $2.88 billion in the last reported quarter, representing a year-over-year change of +22.7%. EPS of $1.36 for the same period compares with $0.99 a year ago.

For the current quarter, Vertiv is expected to post earnings of $1.00 per share, indicating a change of +56.3% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

Vertiv has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.

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