CoStar falls 5.0% after quarterly results and guidance update

What happened

CoStar (CSGP) fell 5.0% on October 27, 2026, because its quarterly results and a guidance update prompted profit-taking after a recent rally. The stock closed at $32.01 on volume that was 1.2 times its 20-day average. The company reported record third-quarter revenue of $952 million and quarterly EPS of $0.38, beating the Zacks consensus of $0.34.

How big was the move

The session was larger than usual for the stock, with the drop equal to 1.7 times a typical daily move for this stock. That underperformed the Real Estate sector median by 4.8 percentage points while the S&P 500 rose 0.6% on the day. Over the last five sessions the stock fell 3.1%, and trading remained 1.2 times its 20-day average.

The technical picture

The stock traded 4.7% above its 20-day moving average and 4.8% above its 50-day moving average, but it remained 13.9% 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) stood at 54, in a neutral range between 30 and 70. The share price sits 59.5% below its 52-week high and has risen 18.5% over one month while falling 58.9% over one year.

Fundamentals and valuation

For the four quarters through September 30, 2026, revenue was $3.67 billion, a growth of 20.2% from a year earlier, and diluted earnings per share were $0.44, which rose 696.4% versus a year earlier. Gross margin was 76.2% compared with 79.3% a year earlier, and operating margin was 5.8% versus 2.7% a year earlier. Free-cash-flow margin stood at 8.3% and return on invested capital at 0.6%. The balance sheet showed net cash of $270.0 million, and share count over one year decreased by 4.3%.

Valuation metrics remain elevated. The stock traded at 73.2 times trailing earnings and 23.4 times expected forward earnings, with a free-cash-flow yield of 2.2%. The price to trailing earnings is lower than 90% of its own readings over the past five years, where the five-year median was 126.6 times earnings. PromtFinance scores rank Growth 89 and Quality 89, while Momentum is 20 and Stability is 32, highlighting a contrast between healthy underlying growth and weak price momentum.

Earnings and analyst expectations

CoStar reported last on October 27, 2026, with earnings per share of $0.38 against $0.34 expected, 12.8% above estimates. Management said adjusted EBITDA reached $229 million, the highest ever, and raised full-year 2026 adjusted EBITDA guidance. The company reported net income of $74 million for the quarter and record third-quarter revenue of $952 million, up from $834 million a year earlier. CoStar has beaten estimates for 12 consecutive quarters, with an average surprise over the last four reports of 17.6% above estimates.

Business Wire reported that CoStar entered into a definitive agreement to acquire Vexcel Group, operator of a large survey-grade aerial imagery program. The company said the deal adds high-resolution aerial imagery and enables tens of billions of new AI-derived data fields to CoStar's search and discovery capabilities. Management said the acquisition complements its view that adjusted EBITDA would be higher for the full year after the quarter.

Analysts show a consensus rating of Buy from 27 analysts and a consensus price target of $36.36, which is 13.6% above the closing price. Fifty-nine percent of analyst ratings are Buy or Strong Buy. Historically, the typical two-day reaction after recent reports was a rise of 0.5%, underscoring that the market’s negative move on October 27 was larger than the company’s recent post-earnings pattern.

What to watch

• October 27, 2026: last report — quarterly EPS of $0.38, 12.8% above estimates.
• February 23, 2027: next earnings report date.
• Company statement that it raised full-year 2026 adjusted EBITDA guidance following the quarter.
• Definitive agreement to acquire Vexcel Group to add high-resolution aerial imagery and new AI-derived data fields.