A near 30% hit to shares of CoStar Group Inc (NASDAQ: CSGP) spells opportunity to buy a quality name at a discount, says Nicholas Jones – a JMP Securities analyst.
CoStar stock could climb to $110
He reiterated his “outperform” rating on the real estate data and analytics firm on Wednesday.
Jones announced a price target of $110 for CoStar stock in a research note today that signals potential for a whopping 50% gain from here.
The analyst is super bullish on CSGP because he recently had a meeting with the company’s investor relations team that made him more confident in its future prospects.
We felt that CSGP’s tone was consistent with prior earnings calls, and while it may be experiencing some volatility in the early stages of monetising Homes.com, the team does not seem surprised, and rather sounded prepared for the dynamic.
CSGP recently named a new CFO
Nicholas Jones blamed third-party data for creating noise around Homes.com and weighing on the share price but said:
We do not view the call as thesis changing and believe CSGP has ample profitability to continue investing in its Homes.com business.
JMP Securities’ bullish call on CoStar stock arrives only a day after the Nasdaq-listed firm named Chris Lown its new chief financial officer.
Wellington Management Group also announced to have trimmed its stake in CSGP by some 21% in the fourth quarter this week. The firm, however, still owns more than 2.8 million shares of CoStar Group Inc at writing.
CoStar had a strong fiscal Q1
In late April, CoStart reported its financial results for the first quarter that topped Street estimates. Andy Florance – the chief executive of CoStar Group said at the time:
With less than two months of selling in Q1, Homes.com membership subscriptions reached nearly $40 million in net new bookings. This is by far the strongest sales launch of any product in the company’s history.
CSGP also raised its guidance for the full year in April. It now forecasts revenue to fall between $2.76 billion and $2.77 billion in 2024 that suggests about a 13% annualised growth on up to 62 cents a share of non-GAAP earnings.
Note that JMP Securities is not the only investment firm that’s bullish on CoStar shares at the moment. Ashish Sabadra of RBC Capital is also constructive on the real estate data and analytics firm and sees upside in it to $109 per share.
Still, corporate insider sentiment on CoStar Group Inc is currently neutral, as per Business Insider.
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