GET DAILY SIGNALSCoStar Group (CSGP) Delivers Strong Q3 Earnings Beat but Shares Decline -5% on Forward Guidance
Key Takeaways
- CoStar Group reported record third-quarter 2026 revenue of $952 million, up 14.2% year over year from $834 million.
- Adjusted earnings per share (EPS) came in at $0.38, beating consensus estimates of $0.34 by $0.04.
- Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) doubled year over year to $229 million, well above the company's $190–$210 million guidance range.
- Net income swung to a profit of $74 million, compared with a net loss of $31 million in the same quarter last year.
- The company raised its full-year 2026 adjusted EBITDA guidance to a range of $820–$840 million, citing roughly $150 million in identified cost savings.
- Shares declined roughly 5% after the report, as investors weighed softer fourth-quarter revenue guidance against the earnings beat.
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Putting the Results in Context
CoStar Group's third-quarter performance highlights a meaningful shift for the commercial and residential real estate data provider. After a period of heavy investment, the focus has clearly moved toward margin expansion and profitability. The ability to more than double adjusted EBITDA while still delivering solid revenue growth points to improving operating leverage. In my view, this report also offers a useful window into broader commercial real estate trends, since CoStar's data products reflect real-time transaction volumes, pricing, and leasing activity. The combination of stronger profitability and more measured fourth-quarter guidance sets the near-term tone for the stock.
Breaking Down the Reported Figures
CoStar Group posted record third-quarter 2026 revenue of $952 million, a 14.2% increase from $834 million in the same period last year and modestly ahead of consensus estimates near $946 million. Adjusted EPS reached $0.38, topping the $0.34 analyst consensus and rising 65% from $0.23 a year earlier. On a GAAP basis, net income attributable to common shareholders was $74 million, or $0.18 per diluted share, versus a net loss of $31 million in the prior-year quarter.
Adjusted EBITDA rose to $229 million, doubling from $114 million a year ago and exceeding the company's prior guidance range of $190–$210 million. Adjusted net income increased 59% to $153 million. Management lifted full-year 2026 adjusted EBITDA guidance to $820–$840 million and provided fourth-quarter revenue guidance of $976–$996 million, with a midpoint near $986 million. The company also raised its full-year adjusted EPS outlook to roughly $1.40 at the midpoint. I also checked this using Tickeron’s AI Screener to compare the stock against industry peers.
Market Reaction and Investor Sentiment
Even with the earnings beat, CoStar Group shares fell roughly 5% after the release. The move appeared driven mainly by fourth-quarter revenue guidance. Management's midpoint outlook of about $986 million implies year-over-year revenue growth slowing to roughly 9–10%, below the double-digit rates investors had come to expect. Attention shifted from the profitability improvement toward questions about the durability of top-line momentum as the company moves past a phase of elevated spending. The gap between the better-than-expected adjusted EPS and the cautious revenue commentary shows how sensitive sentiment remains to growth expectations, even as margins strengthen.
Forward Outlook and Key Factors to Watch
Looking ahead, several themes from the third-quarter report stand out. Revenue growth pace is one. Profitability has accelerated sharply, yet fourth-quarter guidance points to a more moderate trajectory, so confirming that revenue can sustain near double-digit expansion will be important for the stock's direction.
Another element is the cost-efficiency program. Management has identified roughly $150 million in savings for this year and sees potential for at least $200 million more over the next 12 to 18 months. How quickly those savings come through without hurting revenue growth will influence margins going forward.
Finally, the longer-term goal of reaching a 2028 adjusted EBITDA target of $1.25 billion gives a framework for assessing execution. Commercial real estate conditions, subscription retention, and ongoing investments in data and technology will all play a role in whether that target stays achievable.
Enhancing Analysis with AI Tools
When reviewing earnings-driven names like this one, I often rely on Tickeron's AI-powered tools to scan for patterns and compare fundamentals across the sector. The AI Screener helps surface relevant peers and technical signals quickly, which complements traditional fundamental work and supports more informed decisions around post-earnings moves.
Disclaimer
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
CSGP in downward trend: price may drop because broke its higher Bollinger Band on October 22, 2026
CSGP broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options. The A.I.dvisor looked at 29 similar instances where the stock broke above the upper band. In 22 of the 29 cases the stock fell afterwards. This puts the odds of success at 76%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for CSGP moved out of overbought territory on October 23, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 21 similar instances where the indicator moved out of overbought territory. In 12 of the 21 cases, the stock moved lower in the following days. This puts the odds of a move lower at 57%.
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 46 of 62 cases where CSGP's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 74%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where CSGP declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 70%.
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 08, 2026. You may want to consider a long position or call options on CSGP as a result. In 49 of 87 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 56%.
The Moving Average Convergence Divergence (MACD) for CSGP just turned positive on October 08, 2026. Looking at past instances where CSGP's MACD turned positive, the stock continued to rise in 27 of 48 cases over the following month. The odds of a continued upward trend are 56%.
CSGP moved above its 50-day moving average on October 15, 2026 date and that indicates a change from a downward trend to an upward trend.
The 10-day moving average for CSGP crossed bullishly above the 50-day moving average on October 20, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 13 of 18 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 72%.
Following a +7.31% 3-day Advance, the price is estimated to grow further. Considering data from situations where CSGP advanced for three days, in 173 of 302 cases, the price rose further within the following month. The odds of a continued upward trend are 57%.
The Aroon Indicator entered an Uptrend today. In 93 of 154 cases where CSGP Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 60%.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 47 (best 1 - 100 worst), indicating steady price growth. CSGP’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 84 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 89 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 93 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.635) is normal, around the industry mean (2.122). P/E Ratio (177.833) is within average values for comparable stocks, (53.105). Projected Growth (PEG Ratio) (0.099) is also within normal values, averaging (0.683). Dividend Yield (0.000) settles around the average of (0.105) among similar stocks. P/S Ratio (3.566) is also within normal values, averaging (5.807).
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. CSGP’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 94, placing this stock worse than average.
Industry description
Market Cap
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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General Information
a provider of information, analytics and marketing services
Industry RealEstateDevelopment
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