Wells Fargo Remains Cautious on CoStar Group (CSGP) but Sees Rival Lawsuits as Neutral to Positive News

Core Insights - CoStar Group Inc. is viewed as a strong investment option by Wall Street analysts, despite a recent price target reduction by Wells Fargo from $70 to $60, maintaining an Underweight rating [1] - The company reported a significant revenue increase of 20% year-over-year in Q3 2025, totaling $834 million, with adjusted EBITDA rising by 51% to $115 million [2] - Total net new bookings reached $84 million, marking a substantial growth of 92% [2] Legal Challenges and Market Position - CoStar faces legal challenges, including a $1 billion-plus copyright infringement claim against Zillow and an FTC antitrust suit against Zillow and Redfin, which could impact the competitive landscape [3] - Wells Fargo perceives the ongoing lawsuits against competitors as neutral to slightly positive news for CoStar, suggesting potential market advantages [1][3] Strategic Focus and Resource Allocation - The company is currently integrating new acquisitions, such as Domain, while also investing in AI technologies, which may not provide immediate returns [3] - Despite the potential of CoStar as an investment, there are suggestions that other AI stocks may offer greater upside with less risk [4]