CoStar Group Set to Report Q4 Earnings: What's in Store for the Stock?

Core Viewpoint - CoStar Group is expected to report fourth-quarter 2024 earnings with projected revenues between $693 million and$703 million, indicating a year-over-year growth of approximately 9% at the midpoint, while earnings per share are anticipated to be between 21 cents and 23 cents [1] Revenue Expectations - The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $701 million, suggesting a growth of 9.51% from the year-ago quarter's levels [3] - The Zacks Consensus Estimate for fourth-quarter earnings has remained steady at 22 cents per share, indicating a 33.33% decline from the figure reported in the year-ago quarter [2] Performance Drivers - CoStar Group's fourth-quarter performance is likely to benefit from a robust portfolio of marketplaces, including Apartments.com, LoopNet, and Homes.com [4] - Increased traffic and higher advertising expenditures on Apartments.com are expected to contribute to top-line growth [5] - Homes.com network traffic reached a record of 130 million unique visitors in the third quarter of 2024, a 17% year-over-year increase, which is anticipated to boost user engagement and revenue potential [5] - Unique visitors for Homes.com reached 85 million in the third quarter of 2024, marking a 38% year-over-year increase [6] - The introduction of new features like the Owner module is expected to enhance user engagement and attract more users [7] - The strengthening international segment and positive outlook for real estate marketplaces are expected to bolster LoopNet's performance [7] - CoStar Group's growth trajectory has been supported by a consistent acquisition strategy, including notable acquisitions like Visual Lease and OnTheMarket [8] Challenges - The launch of Homes.com has presented challenges, as sales teams are initially shifting focus away from core products, leading to reduced productivity [9] - Persistent inflation and higher interest rates are weighing on consumer confidence, which is expected to negatively impact CoStar Group's results in the upcoming quarter [9] Earnings Outlook - CoStar Group has an Earnings ESP of 0.00% and currently carries a Zacks Rank 3, indicating that the odds of an earnings beat are not favorable [10][11]