Value
4.6/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 7.8 |
| EV/EBITDA | 0.0 |
| p ocf | 4.4 |
| Analyst target | 5.0 |
- ▸P/OCF: 26.1x (FFO proxy — REITs gated off P/E)
CSGP · Why this verdict
Why CoStar Group (CSGP) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
This real estate information services business delivers 22% revenue growth and beats earnings by an average of nearly 21% across four consecutive quarters, supported by a wide economic moat and exceptional free cash flow conversion — but a confirmed price downtrend with a death cross in force blocks a constructive entry; the 37.2% upside to analyst targets and a highly favorable risk/reward ratio of 8.86-to-1 make this a high-priority name to revisit once the technical backdrop stabilizes.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue is growing at 22% year over year, a pace that far exceeds what the market typically demands to justify reinvestment at current valuations. Growth | Revenue growth stays above 15% year over year for 4 consecutive reported quarters. | →Stable |
| CounterA slowdown in commercial real estate transaction volumes or platform pricing pressure could rapidly compress the growth rate, as high-growth compounders tend to re-rate sharply on the first deceleration signal. | ||
The company has beaten consensus estimates in all four of the most recent reported quarters with an average positive surprise of nearly 21%, suggesting that management consistently guides conservatively and delivers above expectations. Earnings | EPS surprise remains positive for each of the next four quarters, averaging above 10% per quarter. | ↑Improving |
| CounterThe unusually large average surprise of nearly 21% reflects a very low consensus bar; if analysts sharpen their models and revise estimates upward aggressively, the beat streak may continue on paper while the incremental upside signal fades. | ||
The stock is in a confirmed price downtrend — below its 200-day moving average with the 30-day slope declining at 13%, and a death cross in force — which blocks a constructive technical setup regardless of the fundamental quality. Momentum | Price closes above its 200-day moving average and the 50-day moving average crosses back above the 200-day for 4 consecutive weeks, confirming the downtrend has ended. | ↓Deteriorating |
| CounterMACD has been improving and RSI sits at 46 despite the death cross, suggesting the selling pressure may be decelerating; the downtrend could resolve faster than a purely trend-following view implies. | ||
The business carries a wide economic moat and converts free cash flow at 808% of reported net income, reflecting strong cash generation that is understated by accounting earnings — a durable quality signal consistent with a high Piotroski F-Score of 8 out of 9. Quality | Free cash flow remains above 400% of net income and the Piotroski score stays at 7 or above for 4 consecutive quarters. | →Stable |
| CounterThe extreme gap between free cash flow and net income is a structural accounting feature for this business model; if growth spending accelerates significantly, free cash flow could compress toward reported net income and narrow the quality premium. | ||
At current prices, there is 37.2% upside to the analyst consensus price target, and the risk/reward structure is highly favorable at 8.86-to-1 — a wide margin that offers significant room for error even if the recovery takes time. Price targets | Price appreciates to within 10% of the $43.97 take-profit target over the next 12 months as the fundamental thesis plays out. | →Stable |
| CounterA rich upside percentage is only meaningful if and when the downtrend resolves; if the technical deterioration continues, the gap between current price and analyst target could widen further before any convergence occurs. | ||
Revenue is growing at 22% year over year, a pace that far exceeds what the market typically demands to justify reinvestment at current valuations.
→StableGrowth
- Expectation
- Revenue growth stays above 15% year over year for 4 consecutive reported quarters.
CounterA slowdown in commercial real estate transaction volumes or platform pricing pressure could rapidly compress the growth rate, as high-growth compounders tend to re-rate sharply on the first deceleration signal.
The company has beaten consensus estimates in all four of the most recent reported quarters with an average positive surprise of nearly 21%, suggesting that management consistently guides conservatively and delivers above expectations.
↑ImprovingEarnings
- Expectation
- EPS surprise remains positive for each of the next four quarters, averaging above 10% per quarter.
CounterThe unusually large average surprise of nearly 21% reflects a very low consensus bar; if analysts sharpen their models and revise estimates upward aggressively, the beat streak may continue on paper while the incremental upside signal fades.
The stock is in a confirmed price downtrend — below its 200-day moving average with the 30-day slope declining at 13%, and a death cross in force — which blocks a constructive technical setup regardless of the fundamental quality.
↓DeterioratingMomentum
- Expectation
- Price closes above its 200-day moving average and the 50-day moving average crosses back above the 200-day for 4 consecutive weeks, confirming the downtrend has ended.
CounterMACD has been improving and RSI sits at 46 despite the death cross, suggesting the selling pressure may be decelerating; the downtrend could resolve faster than a purely trend-following view implies.
The business carries a wide economic moat and converts free cash flow at 808% of reported net income, reflecting strong cash generation that is understated by accounting earnings — a durable quality signal consistent with a high Piotroski F-Score of 8 out of 9.
→StableQuality
- Expectation
- Free cash flow remains above 400% of net income and the Piotroski score stays at 7 or above for 4 consecutive quarters.
CounterThe extreme gap between free cash flow and net income is a structural accounting feature for this business model; if growth spending accelerates significantly, free cash flow could compress toward reported net income and narrow the quality premium.
At current prices, there is 37.2% upside to the analyst consensus price target, and the risk/reward structure is highly favorable at 8.86-to-1 — a wide margin that offers significant room for error even if the recovery takes time.
→StablePrice targets
- Expectation
- Price appreciates to within 10% of the $43.97 take-profit target over the next 12 months as the fundamental thesis plays out.
CounterA rich upside percentage is only meaningful if and when the downtrend resolves; if the technical deterioration continues, the gap between current price and analyst target could widen further before any convergence occurs.
Per-dimension breakdown
Quality
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.3 |
| ROA | 0.3 |
| Gross margin | 10.0 |
| Op margin | 3.3 |
| Net margin | 1.0 |
| Current ratio | 7.6 |
| FCF quality | 10.0 |
| Moat | 7.9 |
| Rule of 40 | 5.5 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 558% FCF/NI
- ▸Wide economic moat
- ▸Strong Piotroski F-Score: 9/9
Growth
7.1/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 7.1 |
Momentum
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 2.7 |
| OBV | 1.0 |
| MA position | 6.0 |
| Volume | 2.5 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope -12.9%/30d — confirmed downtrend
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 7.3 |
| erm sentiment | 2.2 |
- ▸Estimates falling as sentiment proxy (-7.1%)
Insider
6.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.5 |
| holder change | 6.4 |
| notable moves | 7.0 |
- ▸Insider buying (low materiality) — $2,489,837 (0.019% of mkt cap)
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.6 |
| quality rank | 4.1 |
| growth rank | 7.6 |
- ▸Conservative debt levels
Technical
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.4 |
| support resistance | 4.0 |
| 52w position | 0.0 |
Risk (lower is worse)
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.9 |
| days to cover | 8.7 |
| volatility | 1.6 |
| put call | 0.0 |
| implied vol | 3.4 |
| max pain risk | 7.0 |
| beta | 8.6 |
| debt equity | 9.4 |
- ▸Elevated put/call: 16.62
Catalyst
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 1.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
- ▸Estimates down -7.1% (30d)
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:56d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.3<4.5
- ASYMMETRY:0.5<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.54
Upside
+4.7%
Downside
8.7%
Sizing output
AVOID
SetupRange Bound — RSI 57 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilitySpeculative — Drawdown -67% (>40% off 52w high)
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.3<4.5, ASYMMETRY:0.5<1.5@spot, DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 0.54 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.1, Catalyst at 6.6, and Insider at 6.3; the weakest are Technical at 2.8, Momentum at 3.3, and Value at 4.6. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.54 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Revenue Growth
Trip ifRevenue growth falls below 15% year over year for 2 consecutive quarters.
- P2Earnings Beat Discipline
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P3Confirmed Price Downtrend
Trip ifPrice closes above its 200-day moving average and sustains that level for 4 consecutive weeks.
- P4Moat And Cash Conversion
Trip ifFree cash flow falls below 200% of net income for 2 consecutive quarters.
- P5Material Upside To Analyst Target
Trip ifPrice rises above $40, closing more than 90% of the gap to the $43.97 take-profit target.