CoStar Group Inc (CSGP, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $77.61, CoStar Group Inc has witnessed a daily gain of 0%, marked against a three-month change of -4.46%. A thorough analysis, underlined by the GF Score, suggests that CoStar Group Inc is well-positioned for substantial growth in the near future.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 7/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 6/10
- Momentum rank: 8/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With high ranks in financial strength, profitability, and growth, and slightly lower yet strong ranks in GF Value and momentum, GuruFocus assigned CoStar Group Inc the GF Score of 95 out of 100, which signals the highest outperformance potential.
Understanding CoStar Group Inc Business
CoStar Group Inc, with a market cap of $31.69 billion and sales of $2.39 billion, operates as a leading provider of commercial real estate data and marketplace listing platforms. Its comprehensive data offering includes analytical information on over 5 million commercial real estate properties across various subsectors such as office, retail, multifamily, and more. The company's flagship brands include CoStar Suite, LoopNet, Apartments.com, and others, with a significant portion of its revenue being subscription-based. CoStar Group Inc has also expanded its international presence, reaching markets in Canada, the United Kingdom, Spain, and France.
Financial Strength Breakdown
CoStar Group Inc's Financial Strength rating reflects a resilient balance sheet capable of withstanding financial headwinds, indicative of a well-managed capital structure. The company's impressive Altman Z-Score of 13.68 signals a strong buffer against financial distress, underscoring its robust financial stability. Additionally, a Debt-to-Revenue ratio of 0.46 demonstrates CoStar Group Inc's strategic debt management, further solidifying its financial health.
Profitability Rank Breakdown
The Profitability Rank of CoStar Group Inc highlights its superior ability to generate profits compared to its industry peers. The company's Gross Margin has consistently increased over the past five years, with figures from 2018 to 2022 showcasing a steady rise from 77.35% to 81.03%. This upward trend emphasizes CoStar Group Inc's efficiency in converting revenue into profit. Furthermore, a Predictability Rank of 4.5 stars out of five reflects the company's consistent operational performance, instilling greater investor confidence.
Growth Rank Breakdown
CoStar Group Inc's high Growth rank is a testament to its commitment to business expansion. The company's 3-Year Revenue Growth Rate of 12.8% surpasses 70.17% of companies in the Real Estate industry. Additionally, CoStar Group Inc has experienced a significant increase in EBITDA over the past few years, with a three-year growth rate of 6.8 and a five-year rate of 14.6, highlighting its sustained growth capabilities.
Conclusion: CoStar Group Inc's Position for Outperformance
Considering CoStar Group Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's unparalleled position for potential outperformance. The company's strategic market positioning, consistent revenue growth, and strong financial foundation make it a compelling choice for investors seeking long-term value. As the commercial real estate industry continues to evolve, CoStar Group Inc's innovative platforms and data-driven approach position it to capitalize on emerging opportunities.
For GuruFocus Premium members interested in discovering more companies with strong GF Scores, the following screener link is available: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
