The commerical real-estate giant should reconstruct its board and consider strategic alternatives for its Homes.com portial, Third Point CEO Daniel Loeb wrote in a letter. ...

Upgrades - CoStar Group (CSGP) upgraded to Buy from Neutral with an $80 price target due to low expectations, past peak investment, and momentum from Homes.com, along with an anticipated AI-driven product update [2] - Teleflex (TFX) upgraded to Buy from Hold with a $138 price target as the company plans to sell its acute care, interventional urology, and manufacturing businesses for $2 billion, expecting significant earnings accretion from share repurchases and debt repayment by 2027 [3] - CoreWeave (CRWV) upgraded to Buy from Hold with a $140 price target, with a solid medium-term outlook ahead of the Q4 report [3] - Affirm (AFRM) upgraded to Buy from Hold with a $100 price target after submitting an application to establish Affirm Bank, which could be a game-changer [4] - Target (TGT) upgraded to Peer Perform from Underperform without a price target, with a wide margin of safety despite reduced estimates due to the company's owned real estate [4] Downgrades - Procter & Gamble (PG) downgraded to Hold from Buy with a price target of $156, up from $150, as the pace of recovery is expected to drag [5] - Stryker (SYK) downgraded to Hold from Buy with a $387 price target following a transfer in analyst coverage, with a well-understood valuation reflecting a "beat/raise precedent" [5] - Insulet (PODD) downgraded to Hold from Buy with a $294 price target after a transfer in analyst coverage, noting that competitive advantages may narrow [5] - Matador (MTDR) downgraded to Equal Weight from Overweight with a price target of $47, down from $61, due to stock valuation incorporating structural considerations and recent productivity variability [5] - SkyWater Technology (SKYT) downgraded to Hold from Buy with a price target of $35, up from $24, after agreeing to be acquired by IonQ for $35 per share or $1.88 billion [5]

Core Viewpoint - Third Point LLC expresses significant concerns regarding CoStar Group's governance, management incentives, and capital allocation strategies, particularly criticizing CEO Andy Florance's handling of the residential real estate (RRE) segment, which has led to substantial shareholder losses and poor stock performance [1][3][12]. Governance and Management Issues - Third Point highlights a lack of effective board oversight and accountability, suggesting that the board has failed to manage CEO Florance's performance, resulting in excessive compensation despite poor results [13]. - The firm emphasizes the need for a majority of the board to be replaced with more qualified directors and for management compensation to be more closely tied to total shareholder return [20]. Capital Allocation and Financial Performance - CoStar has reportedly invested approximately $5 billion in its RRE segment over the past five years, with minimal returns, generating only $60 million in revenue for 2024 and an expected $80 million for 2025 [7][8]. - The company's RRE strategy has been described as a multi-year failure, with management's projections for revenue and EBITDA margins repeatedly missed, leading to a significant decline in shareholder value [6][9][11]. Stock Performance - CoStar's stock has underperformed significantly, declining by 27% over the past five years, in stark contrast to the S&P 500's total return of 94% during the same period [12]. - The company's adjusted EBITDA is projected to be depressed by more than 65% in 2025 due to ongoing losses in the RRE business, despite growth in its core commercial real estate (CRE) segment [11]. Core Business Potential - Despite the challenges in the RRE segment, Third Point believes that CoStar's core CRE business has substantial growth potential, with opportunities for double-digit revenue growth and significant margin expansion [14][15]. - The firm argues that the core CRE business can achieve over 50% EBITDA margins in the medium term and sustain further growth, positioning it as a valuable long-term investment [16][18]. Immediate Actions Required - Third Point calls for immediate actions to restore governance credibility and protect shareholder value, including eliminating losses from the RRE segment and refocusing on the core CRE business [19][20].

With its first activist campaign in three years, hedge fund Third Point will try to force CoStar Group , the owner of Apartments.com and Homes.com, to change board directors and restructure operation... ...

Investment management company Vulcan Value Partners recently released its fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. All the strategies of Vulcan Value Partners delivered positive results in the year. The Large Cap Composite (Net) returned -1.5% in Q4 and 7.9% YTD, the Small Cap Composite (Net) gained 3.2% in Q4 and 9.5% YTD, The Focus Composite (Net) retuned 0.1% in Q4 and 7.1% YTD, Focus Plus Composite (Net) returned 0.1% in Q4 and 6.2% YTD and the All-Cap Composite ...

Core Insights - Significant options trading activity detected for CoStar Group, totaling $1,473,080, indicating investor interest [1] - Expected price movements for CoStar Group range from $40.0 to $95.0 over the past three months, suggesting bullish sentiment [2] - Analysts propose an average target price of $72.0 for CoStar Group, with varying ratings from different firms [10][13] Options Trading Analysis - The mean open interest for CoStar Group options trades is 3167.44, with a total volume of 3,259.00, reflecting liquidity and interest [3] - Largest options trades include multiple bullish call sweeps, with significant amounts such as $390.7K and $348.0K for strike prices of $75.00 [7] Company Overview - CoStar Group is a leading provider of commercial real estate data, with over 5 million properties analyzed across various sectors, and over 80% of revenue is subscription-based [8] - The company has expanded its presence into Canada, the UK, Spain, and France, indicating growth strategy [8] Current Market Status - CoStar Group's stock price is currently at $67.55, up 4.29%, with upcoming earnings expected in 26 days [11] - Analysts maintain differing ratings, with one holding an Outperform rating targeting $75, while others have lower targets of $55 and $72 [10][13]

Core Viewpoint - The fourth quarter of 2025 experienced a sharp 5% sell-off followed by a quick recovery, with global stocks reaching all-time highs, influenced by concerns over a potential AI bubble and subsequent strong earnings from NVIDIA [4][5]. Portfolio Performance & Attribution - The Polen Global Growth Composite Portfolio returned -2.5% gross of fees and -2.7% net of fees in Q4 2025, underperforming the MSCI All Country World Index, which returned +3.3% [7]. - Top relative contributors included Eli Lilly, Alphabet, and Shopify, while Oracle, Paycom Software, and CoStar Group were the largest detractors [7][8]. - Eli Lilly's stock rallied over 40% in Q4 due to strong financial results and a favorable agreement on drug pricing, despite earlier concerns [8]. - Oracle's performance reversed from the previous quarter, primarily due to skepticism regarding its future revenue tied to OpenAI, impacting its stock negatively [9]. Portfolio Activity - New positions were initiated in Tencent Holdings and Spotify, while positions in Sage Group, Willis Towers Watson, ICON Plc, and Workday were eliminated to fund these investments [10][11]. - Tencent has shown consistent earnings growth of over 30% annually for the past three years, and its valuation is considered reasonable for sustainable revenue growth [11]. - Spotify is viewed as a leading streaming network with significant growth potential, expecting over 20% annual free cash flow growth for the next five years [12]. Outlook - The datacenter capital expenditure cycle is expected to continue, driven by increasing demand and supportive government policies, suggesting a favorable environment for growth in revenues and earnings for key players [17]. - The portfolio is positioned to deliver above-average earnings growth, with a focus on sectors outside of the AI and datacenter themes, ensuring resilience regardless of market drivers [18].

Core Insights - Homes.com released a report analyzing home price trends through December 2025, indicating a moderate appreciation in home prices across major metros and house types [1] Home Price Trends - The nationwide median home price is projected to rise by 1.1%, from $376,025 in December 2024 to $380,000 in December 2025 [2] - Homebuyers have experienced median sale prices between $370,000 and $395,000 for 22 consecutive months, with seasonal variations typically peaking from May to August and dipping from December to March [2] Affordability Analysis - The combination of subdued price appreciation, higher incomes, and lower mortgage interest rates has improved homeownership affordability in 2025, marking the first year-over-year improvement since 2020 [3] - In December 2024, buyers of a median-priced home spent 2.0 weeks of earnings monthly on mortgage payments, while by December 2025, this requirement decreased to 1.8 weeks due to a 3.75% increase in average weekly earnings and a drop in mortgage rates [4] Market Dynamics - The inventory of homes available for purchase increased by 17% in 2025, while the earnings needed to buy a median home declined by over 9% during the same period [5] - The Midwest region experienced the highest home price appreciation, with Saint Louis leading at 7.7% from December 2024 to December 2025, while some Texas markets, such as Dallas-Fort Worth and Austin, saw declines of -4.9% and -3.8%, respectively [5] Market Reach and Brand Awareness - Homes.com reached an audience of 115 million average monthly unique visitors in Q3 2025, with consumer brand awareness increasing from 4% to 33% following a significant marketing campaign launched in February 2024 [9][10]

Inflation and Economic Indicators - December CPI increased by 2.7% year-on-year and 0.3% month-on-month, both in line with expectations; core CPI at 2.6% year-on-year is the lowest since March 2021, better than the expected 2.7%[6] - Michigan Consumer Sentiment Index for January 2026 is at 54.0, showing a rebound for two consecutive months, indicating improved consumer satisfaction regarding inflation[6] Market Performance - S&P 500 index decreased by 0.4% for the week but is up 1.4% year-to-date; Nasdaq index fell by 0.7% weekly and is up 1.2% year-to-date; Russell 2000 index rose by 2.2% weekly and is up 7.7% year-to-date[20] - The market sentiment has shifted to a "greed" zone, with the VIX closing at 15.86, below the critical value of 20[14] Earnings Reports - In the first week of Q4 earnings, 35 S&P 500 companies reported, with 67% exceeding revenue expectations and 79% surpassing EPS expectations, overall EPS exceeded expectations by 5.8%[22] - Financial and consumer discretionary sectors saw earnings upgrades, while energy and healthcare sectors experienced significant downgrades[22] Future Outlook - Inflation is expected to continue its slow decline, with retail sales showing strength; the probability of a rate cut in January is less than 5%[22] - The market is pricing in the first rate cut of 2026 after the new Federal Reserve chair is appointed, likely in June[22] Sector Performance - Among 36 sectors, 19 showed gains, with the top five performers being Coal II (+9.1%), Defense (+5.7%), Non-ferrous Metals (+5.2%), Electrical Equipment (+4.8%), and Consumer Staples (+4.8%)[22]

Core Viewpoint - CoStar Group, Inc. (NASDAQ:CSGP) is viewed as a promising growth stock despite recent downward adjustments in price targets by analysts, indicating potential for future stock price stability due to activism [1][2]. Group 1: Analyst Ratings and Price Targets - Ryan Tomasello from Keefe Bruyette reduced the price target for CoStar Group to $75 from $100 while maintaining an 'Outperform' rating, suggesting that activism may support the stock price [1]. - Wells Fargo lowered its price target to $55 from $60, maintaining an 'Underweight' rating, while BMO Capital cut its target to $72 from $77, keeping a 'Market Perform' rating [3]. Group 2: Company Performance and Outlook - The company's preliminary 2026 guidance and medium-term targets were described as disappointing but indicative of "consistent and strong earnings expansion," which could lead to a stock surge in the future [2]. - CoStar Group operates as a provider of information, analytics, and online marketplace services, with various offerings including CoStar Property, CoStar Leasing, CoStar Owners, CoStar Markets, and CoStar Tenant [4]. Group 3: Valuation Metrics - Keefe Bruyette highlighted CoStar's ongoing 0.8x growth-adjusted multiple, which is considered relatively cheap given its growth profile, suggesting potential undervaluation [2].