A Serial Winner
Updated October, 2024
Market/Symbol
NASDAQ:CSGP
Price
$76.275.8%
Market Cap
$31b
PE Ratio
177.27
Average Volume
3.3m
Pricing delayed 2 hours. Nov 21, 2024 8:00 AM
Investment Thesis
The Platforms Commercial Real Estate Couldn't Breath Without
CoStar own a number of critical platforms for the commercial real estate market;
CoStar Suite - This is the 'Bloomberg' for commercial real estate. It contains all the data and analytics industry players need to run their business.
LoopNet - This is the main listing place for commercial properties, akin to 'Rightmove' in the UK, with 7x the traffic of its nearest competitor.
Apartments.com - The leading listing place for apartments with 2x the visits and conversion rate of its competitors.
Both marketplace businesses are funded by subscription advertising revenue.
CoStar holds a dominant position in the commercial real estate market with strong pricing power and growth. The company has recently made a foray into residential which should offer investors growth for decades to come.
Follow the Experts
Quickly navigate key insights from industry experts and leverage their knowledge and market intelligence.
"What has been the result of CoStar’s multi-decade slog to digitize real estate been so far? 96% subscription revenues, 90% renewal rates, and >100% FCF conversion."
Speedwell Research
Deep Dive Equity Research
Be kept effortlessly informed with updates and our views on why it matters.
What the Pro's Are Asking
Here are the questions that professional investors are asking before making an investment decision.
Yes, each of the platforms faces its own competition;
Reis (Moody’s Analytics)
Provides commercial real estate market data, analytics, and forecasting. Reis is a major competitor to CoStar in the CRE research and analytics space, offering similar data-driven insights for real estate professionals.
LoopNet:
Although LoopNet is owned by CoStar, it competes with other property listing platforms, such as Zillow's Commercial Division or independent local listing platforms, for online commercial property listings.
RealPage:
Offers property management software and real estate data services, particularly for the multifamily residential market, competing with CoStar’s Apartments.com and rental data services.
Zillow Group:
While primarily known for residential real estate, Zillow competes indirectly with CoStar’s residential platforms like Homes.com and Apartments.com, especially in the residential rental space.
CREXi:
An emerging competitor in the commercial real estate marketplace, CREXi provides listing, auction, and data services, competing with CoStar’s LoopNet and Ten-X platforms for property listings and transaction services
The short answer is the year, CoStar has sued several competitors for scraping its proprietary data and customers for password sharing. Some of the most notable cases:
CoStar vs. Xceligent (2017)
In 2017, CoStar sued Xceligent, a rival in the commercial real estate (CRE) data space, for copyright infringement. CoStar accused Xceligent of illegally scraping and copying data and images from CoStar’s databases.
CoStar vs. Civix-DDI (2011)
In 2011, CoStar was sued by Civix-DDI, a company that held patents related to online property searches. Civix-DDI claimed CoStar’s property listings and search functionality infringed on its patents.
CoStar vs. LoopNet (2004)
CoStar filed a lawsuit against LoopNet (before it acquired the company), alleging LoopNet had violated copyright laws by allowing its users to upload property photos and data from CoStar without permission.
CoStar vs. Numerous Real Estate Firms and MLSs (Ongoing)
CoStar has frequently pursued legal action against real estate firms, brokers, and Multiple Listing Services (MLSs) for unauthorized use of its property photos and data. CoStar aggressively protects its intellectual property and has sued companies for scraping its databases and using its copyrighted materials without permission.
In the U.S., home sellers typically hire a real estate agent who lists their property on the Multiple Listing Services (MLS), a centralized database that integrates with platforms like Zillow and Homes.com. The seller's agent determines the buyer's agent's commission, paid by the seller, typically shared at around 5-6%. CoStar is pioneering a 'Your listing, Your lead' strategy, this means that when a buyer contacts an agent about a home, they can contact the listing agent directly and not be forced to go through a buyer's agent as an unnecessary intermediary. This is counter-positioned to current market leader Zillow.
CoStar has shown resilience by adapting its offerings to meet evolving market conditions. For instance, the growth of remote work and shifts in commercial real estate demand have led CoStar to focus on real-time data analytics and predictive market insights. The company's ability to provide detailed analytics and market intelligence allows its clients to make informed decisions in fluctuating markets.
Key risks include:
Economic downturns that affect the commercial real estate market, reducing demand for CoStar's services.
Increased competition from other data providers or online property platforms.
Data privacy regulations that may impact CoStar's ability to collect and share real estate data.
The risk of integration challenges with acquired companies. However, CoStar mitigates some of these risks through its diversified revenue streams and focus on long-term contracts with recurring revenues
In spite of this CoStar has delivered consistent growth through many cycles, despite exposure to an inherently cyclical sector.
Investor Materials
Access the most recent investor updates published by the company.
External Insights
A curated collection of third-party content relevant to the company and sector to help inform your investment decision.
Team
Andy Florence
Founder & CEO
Andy Florance is the Founder and Chief Executive Officer of CoStar Group. Since the company’s founding in 1986, he has led the digitization of the world's real estate, empowering people to discover properties, insights, and connections that improve their businesses and lives.
From founding the company in his dorm room to successful IPO in July 1998, Andy has led CoStar Group’s expansion to its market-leading position today as a publicly traded enterprise included in the S&P 500 Index (NASDAQ: CSGP), the NASDAQ 100 and its prominent spot as a leading global provider of commercial and residential real estate information, analytics, and online marketplaces. CoStar Group serves more than one million clients in total, and its websites have received more than one billion visitors in the past twelve months alone.
Christian M. Lown
CFO
Christian M. Lown, Chief Financial Officer, maintains overall responsibility for the finance function, including investor relations, business development and facilities. Prior to joining CoStar Group, Lown served as executive vice president and chief financial officer at Freddie Mac.
Lown has more than 25 years of banking and finance experience. He was previously EVP and CFO at Navient Corporation. Prior to joining Navient in 2017, he was managing director, Financial Institutions Group at Morgan Stanley, where he co-led the Global FinTech and North America Banks and Diversified Finance investment banking practices. Lown joined Morgan Stanley in 2006 from UBS Investment Bank, where he served as director, Financial Institutions Group and director, of Asian Equity/Derivative Sales.
Before joining UBS in 2003, Lown held various positions at Credit Suisse First Boston, Peregrine Investment Bank, and Credit Lyonnaise Global Emerging Markets.
Frank Simuro
Chief Technology Officer
Frank A. Simuro, CoStar’s Chief Technology Officer, joined the Company in December 1999 as Director of Information Systems. He served as Senior Vice President of Information Systems from May 2005 to January 2008 and was promoted to Chief Information Officer in January 2008. Prior to joining CoStar, Mr. Simuro was Director of Data Warehousing at GRC International (“GRC”). Prior to GRC, Mr. Simuro was a technology consultant specializing in operational efficiency and database technologies. Mr. Simuro received a M.S. in information systems from George Washington University and a B.A. in computer science from State University of New York — Geneseo.
Lisa Ruggles
Senior Vice President, Global Operations
Lisa Ruggles, Senior Vice President, Global Operations, joined CoStar Group in 1999. Ms. Ruggles launched CoStar’s research coverage throughout the United States, Canada, and Europe.
Having earned her Bachelor of Arts degree from Savannah College of Art and Design (SCAD), Ms. Ruggles brings a creative approach to business and problem solving. Among her many accomplishments at CoStar Group, Ms. Ruggles introduced the Toronto-based Research Center serving CoStar's Canadian clients and helped launch the collection of commercial real estate data across Europe. In 2018, she expanded CoStar’s news offering delivering breaking news on national and local commercial real estate happenings across North America and Europe.
Any questions?
Contact: Nirav Karia -
nirav.karia@curationcorp.com
General disclaimer and copyright
This showcase has been commissioned by the Business and prepared and issued by Curation, in consideration of a fee payable by the business. Fees are paid in cash without recourse. Curation may seek additional fees for the provision of content and related IR services for the client but does not get remunerated for any investment banking services.Accuracy of content: All information used in the publication of this showcase has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this showcase and have not sought for this information to be independently verified. Opinions contained in this showcase represent those of Curation at the time of publication. Forward-looking information or statements in this report may contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.Exclusion of Liability: To the fullest extent allowed by law, Curation shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this showcase.No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Curation's solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.Investment in securities mentioned: Curation does not itself hold any positions in the securities mentioned in this report, nor the analysts who responsible for compiling this showcase. However, the respective directors, officers, employees and contractors of Curation may have a position in any or related securities mentioned in this showcase, subject to Curation's policies on personal dealing and conflicts of interest.
United Kingdom
This document is prepared and provided by Curation for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.
United States
Curation relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This showcase is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Curation does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.