Why CoStar Group Stock Wilted on Wednesday

Core Insights - CoStar Group's stock experienced a significant decline of nearly 10% following the release of its quarterly earnings, despite the S&P 500 index remaining flat on the same day [1] Financial Performance - For Q3, CoStar reported revenue of $834 million, reflecting a robust year-over-year increase of 20%, driven by a 92% rise in net new bookings to $84 million [2] - The company's net income, calculated on a non-GAAP basis, increased by 10% to $97 million, translating to an adjusted earnings per share of $0.23 [3] - Analysts had anticipated a higher adjusted net profit of $0.18 per share, although CoStar exceeded the consensus revenue estimate of slightly over $812 million [4] Future Guidance - CoStar's guidance for adjusted net income for the full year 2025 is projected between $0.82 and $0.84 per share, aligning with the analyst consensus of $0.82 [5] - The revenue forecast for 2025 is set at $3.23 billion to $3.24 billion, slightly above the collective analyst estimate of just below $3.23 billion [5] - The company has raised its guidance for adjusted EBITDA for the full year to a range of $415 million to $425 million, marking an increase of $40 million at the midpoint [6] Market Sentiment - Despite posting double-digit increases in key financial metrics, market professionals had expected higher profitability from CoStar [8]