Yahoo Finance CoStar Group (CSGP) Q1 Earnings Beat, Revenues Rise Y/Y
CoStar Group CSGP reported first-quarter 2023 non-GAAP earnings of 29 cents per share, beating the Zacks Consensus Estimate by 16% but decreasing 6.5% year over year.
Revenues of $584.4 million beat the Zacks Consensus Estimate by 0.93% and increased 13% year over year.
Top-Line Details
CoStar revenues (38.5% of revenues) increased 13.3% year over year to $225 million. Apartments.com revenues increased 20% year over year. Net new bookings jumped 17% year over year to $80 million.
Information Services revenues (7.1% of revenues) increased 11.9% year over year to $41.6 million. Multifamily revenues (36.1% of revenues) increased 20.1% year over year to $210.7 million.
LoopNet revenues (10.8% of revenues) were up 16.1% year over year to $63.2 million.
CoStar Group, Inc. Price, Consensus and EPS Surprise
CoStar Group, Inc. price-consensus-eps-surprise-chart | CoStar Group, Inc. Quote
First-quarter residential revenues (2.3% of revenues) were $13.2 million, declining 27.2% year over year.
Other marketplace revenues (5.2% of revenues) decreased 4.2% year over year to $30.6 million.
Operating Details
In the reported quarter, selling and marketing expenses jumped 57.1% year over year to $226.2 million. As percentage of revenues, selling and marketing expenses were 38.7% compared with 27.9% in the year-ago quarter.
General and administrative expenses, as a percentage of revenues, increased 20 basis points (bps) on a year-over-year basis to 15.3%.
Software development expenses, as a percentage of revenues, expanded 90 bps. Customer base amortization expenses contracted 130 bps on a year-over-year basis.
The adjusted EBITDA margin in the first quarter of 2023 was 21% compared with 34.5% in the year-ago quarter.
Balance Sheet and Cash Flow Statement
CoStar reported cash and cash equivalents of $5.05 billion as of Mar 31, 2023, compared with $4.97 billion as of Dec 31, 2022.
The company, however, had long-term debt of $989.5 million as of Mar 31, 2023, compared with $989.2 million as of Dec 31, 2022.
It generated $123.22 million in cash from operations compared with $293.59 million in the previous quarter.
Guidance
CoStar expects 2023 revenues between $2.46 billion and $2.48 billion, indicating revenue growth of 13-14% for the year. Second-quarter 2023 revenues are expected between $603 million and $608 million, indicating year-over-year growth of 13% at the mid-point. The Zacks Consensus Estimate for the quarter’s revenues is pegged at $607.1 million.
The company expects adjusted EBITDA of $505-$520 million. For the second quarter of 2023, CoStar expects adjusted EBITDA of $118-$123 million.
Earnings are expected between $1.21 and $1.24 per share for 2023. Moreover, earnings are expected between 29 and 30 cents per share for the second quarter. The Zacks Consensus Estimate for the quarter’s earnings is pegged at 25 cents per share.
Stocks to Consider
CoStar currently carries a Zacks Rank #4 (Sell).
CSGP shares have gained 14.2% against the Zacks Computer and Technology sector’s decline of 2.2% in the past year.
Here are some better-ranked stocks in the broader sector.
DigitalOcean DOCN, Arista Networks ANET, and Audioeye AEYE are some better-ranked stocks that investors can consider in the broader sector. All three companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DigitalOcean shares have fallen 23.9% in the past year. DOCN is scheduled to release its first-quarter 2023 results on May 9.
Arista Networks’ shares have risen 36.8% in the past year. ANET is scheduled to release its first-quarter 2023 results on May 1.
Audioeye shares have gained 36.6% in the past year. AEYE is scheduled to report its first-quarter 2023 results on May 11.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CoStar Group, Inc. (CSGP) : Free Stock Analysis Report
Arista Networks, Inc. (ANET) : Free Stock Analysis Report
Audioeye, Inc. (AEYE) : Free Stock Analysis Report
DigitalOcean Holdings, Inc. (DOCN) : Free Stock Analysis Report
