CoStar Group (CSGP) Stock Forecast & Price Target

CoStar Group is viewed favorably because its core commercial franchise remains a durable, subscription-heavy moat, with CoStar Suite producing $337 million of revenue, 8.7% year over year growth, and net new bookings up 24% year over year, while the broader commercial business delivered a 35.8% EBITDA margin. Its residential platform is also inflecting positively as Homes.com and Apartments.com scale, with residential revenue up 32.5% year over year to $444 million and residential EBITDA turning positive at $12 million, while management reduces net investment from $850 million in 2025 to $550 million in 2026. The outlook is further supported by a strong balance sheet with $1.3 billion in cash versus $1.2 billion of debt, ongoing repurchases, and a credible path to about 15% revenue CAGR from 2025–2028 with EBITDA margin expansion to 26% in 2028 and 35% by 2030.

CoStar Group is facing a fundamentally negative setup because its heavy investment in Homes.com has not yet demonstrated a clear payoff, with more than $3 billion spent since the 2021 acquisition for $156 million in cash, risking lower margins without an improved growth outlook. Soft commercial real estate transactions and a weaker macro backdrop could pressure its core subscription base, leading to slower growth, cancellations, and potential multiple compression toward about 10x FY27 ex-cash earnings. Competition is also intensifying across its markets, especially in residential software, while activist criticism and the liquidation of Third Point’s position in April 2026 underscore investor concerns about capital allocation and management execution.