CoStar Group
CSGP
is stated to report second-quarter 2022 earnings on Jul 26.
The company expects second-quarter 2022 revenues between $529 and $534 million. Non-GAAP net income per share is anticipated between 20 to 21 cents based on 395 million shares.
For the second quarter, the Zacks Consensus Estimate for revenues currently stands at $532 million, suggesting growth of 10.76% from the year-ago quarter.
The consensus mark for second-quarter earnings remained unchanged at 21 cents per share over the past 30 days, indicating a decline of 19.23% from the year-ago quarter.
The company’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 13.29%.
CoStar Group, Inc. Price and EPS Surprise
CoStar Group, Inc. price-eps-surprise
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CoStar Group, Inc. Quote
Factors to Note
CoStar Group’s second-quarter performance is likely to have benefited from the launch of its new solutions like the CoStar lender products and Listing of the Future. These new solutions are expected to have separated the company’s product portfolio from its competitors and helped it in winning market share.
The company launched CoStar lender products back in February, and it has already added over$1 million in annual revenues. The trend is expected to have continued in the to-be-reported quarter.
CoStar Group-owned Apartments.com launched Listing of the Future after analyzing the current consumer demand through a survey of 45,000 renters, out of which 94% want unit-specific floor plans and availability, while 82% want specific information about the location of units in a building and 63% are interested in the unit’s view.
Listing of the Future provides all of this information while eliminating time-consuming conversations between prospective renters and property managers. This leads to higher quality leads for each listing and is expected to have contributed to the company’s revenue growth as it has been experiencing more and more traffic on its online platform compared to its competitors like other online real estate market space peers
Zillow Group, Inc.
ZG
and
Redfin Corporation
RDFN
.
While CSGP’s competitors, Zillow Group and Redfin Corporation, have been decreasing advertisement spending due to tighter market conditions, the company has been increasing its investments in advertisements and brand promotions on various social media platforms like Tiktok, Instagram, Snapchat, YouTube and Facebook.
As a result, brand awareness about Apartments.Com has been increasing among customers, and property advertising has been increasing on the platform since March. Rising brand awareness along with better pricing power amid market volatility might have favored the top line and margins.
The company’s expansion of operation in France, which is one of the most important real estate markets in the world with an estimated $40 billion in annual investment transaction value, might have acted as a catalyst in the quarter to be reported.
However, rising inflation and the recent U.S. Federal Reserve rate hikes may have impacted the company’s top line negatively as demand for property renting might decline as mortgage rates go higher.
Rising inflation has been leading to the underbuilding of new properties relative to demand in the United States. The elevated mortgage rates have been discouraging homebuilders from starting new projects, which has led to a reduction in the number of properties people can actually rent. This might have weighed on the to-be-reported quarter’s performance.
What Our Model Unveils
Our proven model predicts an earnings beat for CoStar Groupthis time around. Per the Zacks model, the combination of a positive
Earnings ESP
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.
However, that is not the case here. CoStar Group has a Zacks Rank #2 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter
.
A Stock to Consider
Here is a company worth considering, as our model shows that it has the right combination of elements to beat on earnings in its upcoming release:
Dell Technologies
DELL
has an Earnings ESP of +3.07% and a Zacks Rank #1. You can see
t
he complete list of today’s Zacks #1 Rank stocks here
.
Dell’s shares have fallen 20.5% in the year-to-date period compared with the Zacks
Computer and Technology
sector’s decline of 39.3%.
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