What Happened?
Shares of real estate data provider CoStar Group (NASDAQ: CSGP) jumped 6.6% in the afternoon session after the company reported strong second-quarter results that beat estimates and raised its full-year guidance.
The company posted second-quarter revenue of $781.3 million, a 15% year-over-year increase that surpassed analyst expectations. While net income declined, investors focused on record net new bookings, which hit $93 million, signaling strong future demand. This was a 65% increase from the prior quarter and was driven by broad-based strength, including the best bookings quarter for Apartments.com in two years. CoStar also raised its full-year revenue forecast to between $3.135 billion and $3.155 billion and increased its adjusted EBITDA guidance.
The positive results prompted several Wall Street analysts to raise their price targets on the stock. For instance, Goldman Sachs reiterated its Buy rating and $105 price target, while JPMorgan lifted its target to $101, citing the favorable growth outlook. The stock hit a new 52-week high during the session.
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What Is The Market Telling Us
CoStar’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
CoStar is up 27.2% since the beginning of the year, and at $90.10 per share, has set a new 52-week high. Investors who bought $1,000 worth of CoStar’s shares 5 years ago would now be looking at an investment worth $1,290.
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