📊 CSGP Key Takeaways
Is Costar Group, Inc.. (CSGP) a Good Investment?
CoSTAR faces a severe profitability crisis with net income declining 95% YoY despite 18.7% revenue growth, driven by unexplained operating expense surge that crushed operating margin to 0.3%. While the strong balance sheet, excellent gross margins (78.1%), and solid free cash flow provide a financial cushion, the interest coverage ratio of 0.4x signals debt servicing stress and threatens long-term sustainability without urgent operational improvements.
CoStar Group shows strong top-line momentum and a high-quality underlying business model, with 18.7% revenue growth and an exceptional 78.9% gross margin. However, that growth is currently not translating into operating profitability, as operating income turned negative and diluted EPS fell sharply, making the fundamentals solid on balance sheet strength but mixed on earnings quality.
Why Buy Costar Group, Inc.. Stock? CSGP Key Strengths
- Strong topline growth of 18.7% YoY demonstrates demand for core services
- Excellent gross margins of 78.1% indicate healthy unit economics and pricing power
- Fortress balance sheet with low leverage (0.13x D/E) and strong liquidity (2.2x current ratio) provide financial flexibility
- Positive free cash flow of $107M ($1.2B cash position) offers runway to address operational issues
- Strong revenue growth indicates continued demand and platform expansion
- Very high gross margin suggests a scalable, attractive core business model
- Balance sheet is exceptionally strong with high liquidity, large cash reserves, and minimal leverage
CSGP Stock Risks: Costar Group, Inc.. Investment Risks
- Operating margin collapse to 0.3% reflects massive unexplained operating expense increases that offset revenue growth
- Interest coverage ratio of 0.4x is critically low; operating income of $3M inadequately covers debt service obligations
- Net income declined 95% YoY and returns on equity/assets are near zero, indicating capital is being destroyed
- The $698M gap between gross profit and operating income suggests structural cost problems or undisclosed charges
- Negative operating margin shows cost growth is overwhelming revenue gains
- Net income and EPS are near break-even, limiting proof of durable earnings power
- Free cash flow margin is modest, reducing financial flexibility if investment intensity remains high
Key Metrics to Watch
- Operating expense ratio and detailed SG&A breakdown next quarter
- Operating margin trend and path to sustainable profitability
- Interest coverage ratio recovery above 1.0x
- Operating cash flow sustainability and any deterioration in conversion ratios
- Operating margin recovery
- Free cash flow conversion
Costar Group, Inc.. (CSGP) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 2.20x current ratio provides a solid financial cushion.
CSGP Profit Margin, ROE & Profitability Analysis
CSGP vs Services Sector: How Costar Group, Inc.. Compares
How Costar Group, Inc.. compares to Services sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Costar Group, Inc.. Stock Overvalued? CSGP Valuation Analysis 2026
Based on fundamental analysis, Costar Group, Inc.. has mixed fundamental signals relative to the Services sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Costar Group, Inc.. Balance Sheet: CSGP Debt, Cash & Liquidity
CSGP Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Costar Group, Inc..'s revenue has grown significantly by 67% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.92 reflects profitable operations.
CSGP Revenue Growth, EPS Growth & YoY Performance
CSGP Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $732.0M | $3.0M | $0.01 |
| Q3 2025 | $692.6M | -$30.9M | $-0.07 |
| Q2 2025 | $677.8M | $6.2M | $0.01 |
| Q1 2025 | $656.4M | $6.7M | $0.02 |
| Q3 2024 | $624.7M | $6.7M | $0.13 |
| Q2 2024 | $605.9M | $6.7M | $0.05 |
| Q1 2024 | $584.4M | $6.7M | $0.02 |
| Q3 2023 | $556.9M | $72.3M | $0.18 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Costar Group, Inc.. Dividends, Buybacks & Capital Allocation
CSGP SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Costar Group, Inc.. (CIK: 0001057352)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CSGP
What is the AI rating for CSGP?
Costar Group, Inc.. (CSGP) has a Combined AI Rating of SELL from Claude (SELL) and ChatGPT (HOLD) with 78% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CSGP's key strengths?
Claude: Strong topline growth of 18.7% YoY demonstrates demand for core services. Excellent gross margins of 78.1% indicate healthy unit economics and pricing power. ChatGPT: Strong revenue growth indicates continued demand and platform expansion. Very high gross margin suggests a scalable, attractive core business model.
What are the risks of investing in CSGP?
Claude: Operating margin collapse to 0.3% reflects massive unexplained operating expense increases that offset revenue growth. Interest coverage ratio of 0.4x is critically low; operating income of $3M inadequately covers debt service obligations. ChatGPT: Negative operating margin shows cost growth is overwhelming revenue gains. Net income and EPS are near break-even, limiting proof of durable earnings power.
What is CSGP's revenue and growth?
Costar Group, Inc.. reported revenue of $897.0M.
Does CSGP pay dividends?
Costar Group, Inc.. does not currently pay dividends.
Where can I find CSGP SEC filings?
Official SEC filings for Costar Group, Inc.. (CIK: 0001057352) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CSGP's EPS?
Costar Group, Inc.. has a diluted EPS of $0.01.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is CSGP a good stock to buy right now?
Based on our AI fundamental analysis in May 2026, Costar Group, Inc.. has a SELL rating with 78% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is CSGP stock overvalued or undervalued?
Valuation metrics for CSGP: ROE of 0.0% (sector avg: 16%), net margin of 0.3% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
Should I buy CSGP stock in 2026?
Our dual AI analysis gives Costar Group, Inc.. a combined SELL rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is CSGP's free cash flow?
Costar Group, Inc..'s operating cash flow is $152.0M, with capital expenditures of $45.0M. FCF margin is 11.9%.
How does CSGP compare to other Services stocks?
Vs Services sector averages: Net margin 0.3% (avg: 10%), ROE 0.0% (avg: 16%), current ratio 2.20 (avg: 1.5).