CoStar Stock Slumps After Earnings Beat on Lower Revenue Expectations -- Barrons.com

By Shaina Mishkin

CoStar Group's adjusted earnings beat analyst expectations -- but a slight revenue miss and the company's lower revenue estimate for the full year dragged the stock lower in after hours trading.

CoStar, a real estate information technology company, on Tuesday reported non-GAAP earnings of 32 cents on $925 million in revenue. Earnings beat analyst estimates that called for 29 cents a share, while revenue was a touch below the roughly $929 million expected, according to FactSet.

The company's adjusted Ebitda was $184 million, up 116% from the year prior, CoStar said, and it reaffirmed its full-year Ebitda expectations.

But the company revised its full-year revenue expectations lower to a range of $3.715 billion to $3.755 billion, from a prior range of $3.78 billion to $3.82 billion. The "rare top-line guide-down" was among the reasons "we would expect the shares to react negatively" to the results, KBW analyst Ryan Tomasello wrote in a report following the earnings.

The stock was down 12.8% in after-hours trading shortly following the report. CoStar stock closed roughly 4% higher on Tuesday. Shares have had a bumpy year. Last week it hit $27.14, its lowest close since 2017.

CoStar is "the 'Bloomberg of commercial real estate (CRE) data,'" BMO Capital Markets analysts Jeffrey Silber and Ryan Griffin wrote in a July 17 note, referring to the Bloomberg financial data terminal widely used by Wall Street.

In addition to its commercial real estate information and technology offerings, CoStar offers apartment rentals through Apartments.com and homes for sale through Homes.com, a relatively new entrant to the home listing portal landscape.

CoStar's residential segment reported positive adjusted Ebitda for the first time, CEO andy Florance said in a press release. "We continue to capture more of CoStar Group's $100 billion total addressable market through new product launches and geographic expansion," he said.

Investors had a lot on their minds heading into earnings. The list of the stock's recent headwinds include "the longer ramp in Homes.com profitability, re-segmentation of the business (reduced disclosure), and skepticism about marketplace businesses in an AI world," the BMO analysts wrote in the report, reiterating the stock's Market Perform rating and reducing its price target to $31 from $44.

"Most recently, additional pressure caused by the company returning to M&A, higher interest rates potentially putting pressure on CRE activity and housing origination volumes, and the CFO's resignation," they added.

Higher mortgage rates have kept home sales at a relatively low level. The macroeconomic environment warrants near-term caution, Jefferies analyst Surinder Thind wrote in a July 22 note lowering CoStar's price target to $45 from $55 but maintaining the stock's Buy rating.

"Ultimately, we view the longer term outlook of the company favorably," Thind wrote. "But note near-term headwinds may take time to dissipate."

Write to Shaina Mishkin at shaina.mishkin@dowjones.com

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July 28, 2026 17:08 ET (21:08 GMT)