CoStar Group Shares Dive 8.69% Amid Share Buyback, Revised Analyst Targets

CoStar Group (NASDAQ: CSGP) fell to its lowest level since July 2022 on Jan. 10, with an intraday drop of 2.38% as the stock continued a two-day losing streak, declining 8.69% in two trading sessions.

The selloff follows a $1.5 billion share repurchase authorization approved by the board, aimed at boosting EPS and shareholder value. Despite a 20.4% year-over-year revenue increase in the latest quarter and an EPS beat, the stock has struggled amid mixed analyst reactions. Goldman Sachs, BMO Capital Markets, and other firms revised price targets downward, reflecting caution over valuation and growth pacing, though most maintained positive ratings. The company reaffirmed FY26 revenue guidance of 18% growth and projected adjusted EBITDA of $740–800 million, its highest on record.

Strategic shifts, including cost-cutting at Homes.com and a focus on long-term EBITDA expansion, have drawn scrutiny for prioritizing revenue over near-term margin gains. Institutional investors, however, have increased holdings, signaling confidence in CoStar’s capital allocation and market dominance in commercial real estate data. The stock’s high valuation multiples, including a P/E of 1,257.40, remain a point of debate among analysts.

Broader market dynamics, such as macroeconomic uncertainty and sector-specific trends like Fed rate policy, could further influence CoStar’s trajectory. While its strong balance sheet and governance changes support long-term stability, risks including Homes.com’s profitability timeline and valuation concerns may weigh on short-term momentum. The stock’s performance will likely hinge on its ability to balance growth and margin expansion while meeting ambitious financial targets.