CoStar Group Ahead of Q3 Earnings: Should You Invest in the Stock?

CoStar Group CSGP is slated to report its third-quarter 2024 earnings on Oct 22.

The company expects third-quarter revenues between $692 million and $697 million, indicating growth of 11% year over year at the midpoint of the range. Earnings are expected to be between 15 and 16 cents per share.

The Zacks Consensus Estimate for third-quarter earnings has been steady at 16 cents per share over the past 30 days, suggesting a 46.67% decline from the figure reported in the year-ago quarter.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

For the third quarter, the Zacks Consensus Estimate for revenues is currently pegged at $696.45 million, suggesting growth of 11.49% from the year-ago quarter’s levels.

CoStar Group’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 34.12%.

Let’s see how things have shaped up for the upcoming announcement.

Factors to Note

CoStar Group’s third-quarter performance is likely to have benefited from a robust portfolio of marketplaces, which includes Apartments.com, LoopNet and Homes.com.

The growing momentum within Apartments.com, marked by increased traffic and higher advertising expenditures, is expected to have contributed to CoStar Group’s top-line growth in the to-be-reported quarter.

Homes.com continued to gain traction, with unique visitors reaching 148 million in the second quarter of 2024, a remarkable 197% year-over-year increase. This trend is expected to have boosted CoStar Group’s user engagement and revenue potential in the to-be-reported quarter.

CoStar Group in the second quarter of 2024 introduced new features like the Owner module to further enhance user engagement. This module provides insights into real estate portfolios and it is expected to attract more users and boost customer engagement in the to-be-reported quarter.

The strengthening international segment and the positive outlook for real estate marketplaces are expected to have bolstered LoopNet’s performance in the quarter under review.

CoStar Group’s growth trajectory is likely to have been driven by frequent acquisitions. The OnTheMarket buyout is expected to have driven revenue growth in the U.K. residential market.

The STR product, a benchmarking tool for the hospitality industry, is expected to have experienced strong revenue growth in the to-be-reported quarter.

CoStar Group’s enhancing residential strategies, with a particular focus on Homes.com, are likely to have boosted the top line during the third quarter.

However, persistent inflation and higher interest rates have been dampening consumer confidence. This, along with a challenging macroeconomic environment, is expected to have hurt CoStar Group’s results in the to-be-reported quarter.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

CoStar Group has an Earnings ESP of 0.00% and currently sports a Zacks Rank #1. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Reddit  RDDT has an Earnings ESP of +72.10% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Reddit shares have gained 51.3% year to date. RDDT is set to report its third-quarter 2024 results on Oct. 29.

Carrier Global CARR has an Earnings ESP of +1.18% and a Zacks Rank of #2 at present.

Carrier Global shares have gained 41.8% year to date. CARR is set to report its third-quarter 2024 results on Oct. 24.

Advanced Micro Devices AMD has an Earnings ESP of +0.22% and a Zacks Rank #3.

Advanced Micro Devices shares have gained 6% year to date. AMD is set to report its third-quarter 2024 results on Oct. 29.

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