Yahoo Finance CoStar Group (CSGP) Q1 Earnings Beat Estimates, Revenues Up Y/Y
CoStar Group CSGP reported non-GAAP earnings of 10 cents per share in first-quarter 2024, surpassing the Zacks Consensus Estimate by 66.67% but dropping 65.5% year over year.
Revenues of $656.4 million beat the Zacks Consensus Estimate by 1.10% and increased 12.3% year over year. The upside was driven by robust performance in key segments.
Top-Line Details
CoStar revenues (38.1% of revenues) of $250.3 million missed the consensus estimate by 0.30% and increased 11.2% year over year. Apartments.com revenues increased 21% year over year. In the first quarter, both Apartments.com and CoStar generated more than $1 billion in sales. Net new bookings in the first quarter amounted to $86 million.
Information Services revenues (5% of revenues) of $33 million beat the consensus mark by 1.23% but declined 20.7% year over year.
CoStar Group, Inc. Price, Consensus and EPS Surprise
CoStar Group, Inc. price-consensus-eps-surprise-chart | CoStar Group, Inc. Quote
Multifamily revenues (38.8% of revenues) of $254.8 million beat the consensus estimate by 1.42% and increased 20.9% year over year.
LoopNet revenues (10.5% of revenues) of $69.1 million beat the consensus mark by 0.65% and were up 9.2% year over year.
First-quarter residential revenues (2.8% of revenues) were $18.6 million, beating the consensus mark by 12.73% and increased 40.9% year over year. In March, residential network traffic hit a record of 156 million unique visitors, a 102% increase year over year.
Other marketplace revenues (4.7% of revenues) of $30.6 million beat the consensus mark by 2.69% and were flat year over year.
As reported by Google Analytics, Homes.com achieved a milestone with 110 million unique visitors in the first quarter of 2024, surging 386% year over year.
Operating Details
In the reported quarter, selling and marketing expenses increased 61.8% year over year to $366.1 million. As a percentage of revenues, selling and marketing expenses were 55.8% compared with 38.7% reported in the year-ago quarter.
General and administrative expenses, as a percentage of revenues, declined 30 basis points (bps) on a year-over-year basis to 15%.
Software development expenses, as a percentage of revenues, expanded by 120 bps. Customer base amortization expenses contracted 10 bps on a year-over-year basis.
Adjusted EBITDA margin in the first quarter was 1.9% compared with 21% in the year-ago quarter.
Acquisition Details
In the first quarter of 2024, CoStar Group announced a definitive agreement to acquire Matterport MTTR, a global leader in immersive 3D digital twins and artificial intelligence (AI) for the real estate sector, for $5.50 per share in a cash and stock transaction valued at $1.6 billion.
The acquisition of Matterport represents a move towards integrating Matterport's 3D capture technology into CSGP’s real estate marketplaces, therefore enhancing CoStar's offerings and capitalizing on the growing demand for virtual real estate experiences.
Balance Sheet and Cash Flow Statement
CoStar reported cash and cash equivalents of $5 billion as of Mar 31, 2024, compared with $5.2 billion as of Dec 31, 2023.
The company had a long-term debt of $990.8 million as of Mar 31, 2024, compared with $990.5 million as of Dec 31, 2023.
It generated $139.6 million in cash from operations compared with $489.5 million in the previous quarter.
Guidance
CoStar expects second-quarter 2024 revenues between $674 million and $679 million, indicating year-over-year growth of approximately 12% at the midpoint. The Zacks Consensus Estimate for revenues is pegged at $680.66 million, indicating 12.34% year-over-year growth.
The company anticipates adjusted EBITDA to be between $5 million and $10 million for the second quarter of 2024.
Earnings are expected to be between 9 cents and 10 cents for the second quarter of 2024. The Zacks Consensus Estimate for the second quarter’s earnings is pegged at 10 cents, down a couple of pennies in the past 30 days.
Zacks Rank & Stocks to Consider
CoStar currently carries a Zacks Rank #4 (Sell).
CSGP’s shares have declined 3.1% compared with the Zacks Computer and Technology sector’s rise of 5.7% year to date.
Here are some better-ranked stocks worth considering in the broader sector.
Arista Networks ANET and Pinterest PINS are some better-ranked stocks that investors can consider in the broader sector. Arista Networks and Pinterest each sport Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have gained 6.7% year to date. ANET is set to report its first-quarter 2024 results on May 7.
Pinterest shares have declined 10.8% year to date. PINS is set to report its first-quarter 2024 results on Apr 30.
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CoStar Group, Inc. (CSGP) : Free Stock Analysis Report
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Matterport, Inc. (MTTR) : Free Stock Analysis Report
