CoStar Group Inc (NASDAQ:CSGP) reported upbeat fourth-quarter financial results and issued FY26 adjusted EPS guidance with its midpoint below estimates.CoStar reported quarterly earnings of 31 cents per share which beat the analyst consensus estimate of 27 cents per share. The company reported quarterly sales of $900.000 million which beat the analyst consensus estimate of $885.967 million.CoStar Group affirmed FY2026 adjusted EPS guidance of $1.22-$1.33 and affirmed sales guidance of $3.780 billion-$3.820 ...

Core Viewpoint - Hedge fund D.E. Shaw is advocating for significant changes at CoStar Group, including a board shake-up, due to concerns over the company's underperformance and its investment strategy [1][3]. Group 1: Company Performance and Strategy - D.E. Shaw attributes CoStar's share underperformance to its "high-risk, money-losing" investment in Homes.com, which aggregates home listings [2]. - CoStar's market value is approximately $22 billion, with shares down over 23% year-to-date, partly due to investor concerns about overspending and increased competition [6]. - D.E. Shaw criticizes CoStar's current leadership, particularly Andrew Florance, for being tied to the unsuccessful Homes.com strategy and claims the board is failing in its oversight responsibilities [5]. Group 2: Proposed Changes - D.E. Shaw is calling for CoStar to monetize Homes.com, refocus on its core business, initiate stock buybacks, and restructure executive compensation [5]. - While D.E. Shaw has not explicitly stated plans for a proxy fight, it has left the possibility open in its communications [5]. Group 3: Company Background - CoStar, founded in the 1980s by Andrew Florance, has established itself as a leading provider of commercial real estate data, expanding its offerings over the years to include various property types [4]. - The company's recent expansion into the single-family housing market through Homes.com has been met with challenges, particularly from established competitors like Zillow Group and Realtor.com [5].

Core Insights - The U.S. office market outlook has been slightly upgraded according to CoStar's revised forecast [1] - The near-term projection indicates a positive absorption of 10 million square feet over the next four quarters, contrasting with the previous forecast of a negative absorption of 4 million square feet [1] Summary by Category - **Market Performance** - The third quarter of 2025 is expected to show a performance shift in the U.S. office market [1] - The revised forecast reflects a more optimistic view of the office space demand [1] - **Forecast Changes** - The new forecast anticipates a total of 10 million square feet of positive absorption, an upgrade from the earlier prediction of negative absorption [1]

Core Insights - CoStar Group, Inc. (CSGP) has a market capitalization of $32 billion and is a leading provider of information, analytics, and online marketplace services for the global commercial real estate industry [1] - The company is expected to report a fiscal Q3 2025 EPS of $0.10, reflecting a 44.4% decrease from $0.18 in the same quarter last year, although it has a history of exceeding Wall Street estimates [2] - For fiscal 2025, analysts forecast an EPS of $0.51, down 5.6% from $0.54 in fiscal 2024, but anticipate a significant increase to $1.18 in fiscal 2026, representing a 131.4% year-over-year surge [3] Stock Performance - CSGP stock has increased by 1% over the past 52 weeks, underperforming the S&P 500 Index, which rose by 13.4%, but outperformed the Real Estate Select Sector SPDR Fund, which decreased by 5.4% [4] - Following the release of Q2 2025 results, CSGP shares rose by 6.9% after reporting an adjusted EPS of $0.17 and revenue of $781.3 million, driven by a 65% increase in net new bookings [5] Analyst Ratings - The consensus rating for CSGP stock is "Moderate Buy," with 17 analysts covering the stock: nine recommend "Strong Buy," two suggest "Moderate Buy," five advise "Hold," and one rates it as "Strong Sell" [6] - The average analyst price target for CoStar Group is $97, indicating a potential upside of 28.3% from current levels [6]

Scheme Overview - The Scheme involves Andromeda Australia SubCo Pty Limited (Bidder Sub), a subsidiary of CoStar Group, acquiring 100% of Domain Holdings Australia Limited (Domain) shares, excluding those held by Excluded Shareholders[35] - Domain Shareholders (excluding Excluded Shareholders) will receive $4.43 cash per Domain Share held on the Scheme Record Date, potentially reduced by the Special Dividend amount[35] - The Domain Board intends to pay a Special Dividend of 8.8 cents, potentially entitling shareholders to an Australian tax offset of up to 3.77 cents per Domain Share[35] Independent Expert & Board Recommendation - The Independent Expert (Grant Samuel) concluded the Scheme is fair and reasonable and in the best interests of Domain Shareholders (excluding Excluded Shareholders), valuing Domain Shares between $4.06 and $4.46 per share[39] - The Domain Board unanimously recommends shareholders vote in favor of the Scheme, assuming no Superior Proposal emerges and the Independent Expert maintains their conclusion[42] - Prior to the meeting, Domain Directors who hold or control Domain Shares have voted or procured the voting of all their Domain Shares IN FAVOUR of the Scheme[42] Proxy Votes - Valid proxy instructions received by Domain as at proxy close were directed as follows: 483,890,832 votes (99.88%) in favor, 96,590 votes (0.02%) against, and 490,687 open votes (0.10%)[58] - The proxy votes in favor represent 79.36% of Domain Shareholders (573), while the proxy votes against represent 8.86% of Domain Shareholders (64)[58]