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CoStar Group Reports Q4 2024 Earnings: Revenue Up, EPS Falls Short

CoStar Group's fourth quarter report shows mixed results. Revenue reached $709 million, exceeding estimates, but earnings per share of $0.15 fell short of expectations. Investors are advised to monitor future growth opportunities.

Date: 
AI Rating:   5
Performance Overview
CoStar Group has reported its fourth quarter 2024 earnings, showcasing a mix of positive and negative indicators that can influence investor sentiment.

Revenue Growth
The revenue for Q4 2024 was $709 million, marking a robust increase of 10.8% compared to $640 million in Q4 2023. This growth outperformed analysts' expectations, which were set at $701 million. This indicates strong demand for CoStar's services, contributing positively to its stock outlook. The revenue rise is backed by notable performances in its key segments, particularly Apartments.com, which alone saw a 17% uplift.

Earnings Per Share (EPS)
Conversely, the EPS reported was $0.15, significantly lower than the expected $0.22 and also down from $0.24 in Q4 2023, representing a worrying decline of 37.5%. This shortfall in EPS can negatively affect investor confidence and could lead to a reassessment of the company's profitability metrics.

Net Income
CoStar experienced a substantial decrease in net income, which fell to $60 million from $96.4 million year-over-year, a decline of 37.8%. This loss in profitability, coupled with higher operational costs and external market pressures, poses challenges that may affect stock valuations negatively.

Adjusted EBITDA
Despite the decrease in net income, CoStar's adjusted EBITDA reached $111.9 million, which indicates favorable operational efficiency since it beat management expectations. However, this figure still represents a 14% drop from the previous year, which may raise concerns among investors about ongoing operational challenges.

Future Outlook
Looking ahead, CoStar Group's management foresees revenue in 2025 to land between $2.985 billion and $3.015 billion, indicating confidence in continued growth. For Q1 2025, projected revenue is between $711 million and $716 million. These positive projections may help offset some concerns from Q4 2024 earnings.

Overall, the mix of strong revenue growth alongside disappointing EPS and net income may induce volatility in CoStar's stock price as investors balance optimism about future performance against current profitability struggles.
Stocks:  CSGP