CoStar falls 14.0% after quarterly results and guidance update

What happened

CoStar (CSGP) fell 14.0% on October 28, 2026, because of quarterly results and company commentary. The decline followed a report that the company posted record third-quarter revenue of $952 million, net income of $74 million and adjusted EBITDA of $229 million, which it described as its highest ever and roughly doubled year-over-year. Third-quarter EPS was $0.38, above the Zacks consensus of $0.34. Management raised full-year 2026 adjusted EBITDA guidance and discussed net new bookings of $37 on the October 27, 2026, earnings call. Trading volume ran at 3.3 times its 20-day average as investors absorbed the results, guidance and other company disclosures reported by Business Wire.

How big was the move

The stock fell 14.0% on the session, a move that was 3.9 times a typical daily move for this stock. Over the last five sessions the stock fell 16.3%. The S&P 500 rose 0.3% on the day while the Real Estate sector median fell 0.7%, leaving the stock 13.3 percentage points worse than the sector median. The stock opened 6.3% below the previous close and the surge in trading activity pointed to unusually high investor attention.

The technical picture

The stock closed 9.9% below its 20-day moving average and 9.6% below its 50-day moving average, while it was 25.6% below its 200-day moving average. The 50-day average is below the 200-day average, a sign of a weak longer-term trend. The Relative Strength Index (14 days) was 38, in a neutral range between 30 and 70. The stock sat 65.1% below its 52-week high and had fallen 64.7% over one year, which is 77.4 percentage points behind the S&P 500 for the same period. Volatility was 57% annualized over 60 days, higher than 94% of its own readings over five years, underscoring recent price swings.

Fundamentals and valuation

For the four quarters through September 30, 2026, CoStar reported revenue of $3.67 billion, which grew 20.2% from a year earlier. Diluted earnings per share were $0.44, a figure that rose 696.4% from a year earlier. Gross margin was 76.2% compared with 79.3% a year earlier, while operating margin improved to 5.8% from 2.7% a year earlier. Free-cash-flow margin was 1.8% and return on invested capital was 0.6%. The balance sheet showed net debt of 0.9 times EBITDA, and share count over one year decreased by 4.3%.

On valuation metrics the stock traded at 63.0 times trailing earnings, which is lower than 95% of its own readings over the past five years (five-year median: 126.6 times earnings). Price to forward earnings was 20.1 times expected earnings and free-cash-flow yield was 0.5%. Market value stood at $13.74 billion, leaving the stock priced for strong growth despite recent weakness in the share price.

PromtFinance scores ranked Growth at 71 (Positive) and Quality at 85 (Strong), while Momentum was 5 (Very weak) and Revisions were 95 (Exceptional). The Value score was 47 (Neutral) and Stability was 28 (Very weak). Those mixed scores point to solid fundamental momentum and analyst optimism but weak price momentum and stability.

Earnings and analyst expectations

CoStar's last report on October 27, 2026, delivered third-quarter EPS of $0.38 against $0.34 expected, 12.8% above estimates, and marked the twelfth consecutive quarter beating estimates. The company reported adjusted EBITDA of $229 million and described that as its highest ever, roughly doubled year-over-year. Average surprise over the last four reports was 17.6% above estimates, and the typical two-day reaction after recent reports was that the stock rose 0.5%. Analysts numbered 27 covering the stock, with a consensus price target of $36.36, which is 32.0% above the closing price, and 59% of ratings at Buy or Strong Buy giving a consensus rating of Buy. The next report is scheduled for February 23, 2027.

What to watch

• October 27, 2026: last report — third-quarter EPS of $0.38 against $0.34 expected, 12.8% above estimates
• February 23, 2027: next scheduled earnings report
• Adjusted EBITDA guidance level raised for full-year 2026 (company disclosure during earnings call)
• Share count over one year decreased by 4.3%