Key Takeaways for CoStar Group Stock
- CoStar Group stock delivered Q1 2026 revenue of $897 million, up 23% year-over-year, marking the 60th consecutive quarter of double-digit revenue growth.
- Adjusted EBITDA doubled year-over-year to $132 million, landing 26% above the midpoint of management’s own guidance.
- Operating income reached $3 million in Q1 2026, swinging from a loss of $43 million in Q1 2025, a year-over-year improvement of 107%.
- TIKR’s mid-case model prices CSGP at approximately $72 per share by December 2030, implying around 119% total return from the current price of $33.
CoStar Group Posts Its 60th Straight Quarter of Double-Digit Growth After Q1 2026 Results
CoStar Group (CSGP), the dominant provider of commercial real estate data, residential marketplace technology, and 3D digital twin infrastructure, delivered $897 million in Q1 2026 revenue following its earnings call on April 28, up 23% year-over-year and extending an unbroken streak of double-digit quarterly revenue growth to 60 consecutive quarters.
The headline number on the income statement is not the revenue line. It is the EBITDA line. Adjusted EBITDA of $132 million doubled year-over-year and arrived $17 million above the high end of management’s own guidance range, with CFO Chris Lown attributing the outperformance on the call to a structural, not one-time, shift: “The outperformance in adjusted EBITDA was primarily due to lower personnel costs from cost-saving efforts as we continue to find efficiencies from AI, personnel and other expense initiatives.”
The commercial segment, which covers the CoStar analytics platform, LoopNet, and CoStar Debt Solutions, generated $472 million in Q1 revenue, up 15% year-over-year, with adjusted EBITDA of $161 million at a 34% margin. The residential segment, which includes Apartments.com and Homes.com, generated $425 million in Q1 revenue, up 32% year-over-year, with the residential EBITDA loss shrinking by $56 million year-over-year.
The most important forward signal in the transcript is the Homes.com monetization data.
CEO Andy Florance presented results from an analysis of the first 11,400 Homes.com members comparing commissions earned before and after joining and said in Q1 earnings call: “On average, a Homes.com subscriber earned $36,400 more in commissions in their first year as a member. Against an average annual subscription cost of just $3,400, that’s an 11x return on their investment.”
That return on investment profile is the case for a price increase. Management confirmed fees for new customers would rise on May 1, with potential renewal increases also under evaluation.
The March annual revenue run rate for Homes.com reached $106 million, up 92% year-over-year, against a $550 million net investment target for the full year 2026 that management reaffirmed.
Net new bookings for Q1 were $67 million, up 20% year-over-year. Full-year 2026 revenue guidance was reaffirmed at $3.78 billion to $3.82 billion. Full-year adjusted EBITDA guidance was raised by $30 million at the midpoint to a range of $780 million to $820 million.
CoStar Group Stock’s Operating Leverage Is Inflecting After Eight Quarters of Investment-Driven Losses
CoStar Group stock’s revenue growth has been visible for years. The income statement story that the market has not yet priced in is the operating leverage that is now emerging on the cost side after a sustained period of heavy investment.
Revenue grew 23% year-over-year to $897 million in Q1 2026, a figure consistent with the acceleration that began in Q3 2025, when year-over-year revenue growth stepped up from 15% to 20% before reaching 27% in Q4 2025.
CoStar Group stock’s gross profit of $700 million in Q1 2026 reflects a gross margin of 78%, consistent with the 79% to 80% range the business maintained from mid-2024 through Q3 2025, with cost of goods sold rising to $197 million as the revenue base expanded.
The mechanism that matters is below the gross profit line. Total operating expenses fell to $700 million in Q1 2026 from $605 million in Q1 2025, but the more important signal is the sequential behavior: total operating expenses in Q4 2025 were $662 million, and Q1 2026 came in at $700 million, a modest step up despite revenue holding at the $897 million to $900 million range.
Operating income reached $3 million in Q1 2026, a swing from the $43 million operating loss posted in Q1 2025, the result of gross profit growth of 21% year-over-year running ahead of total operating expense growth, the first clear evidence of operating leverage at the GAAP level.
CoStar Group Holds a Gross Margin Premium Over Zillow and Verisk Across Eight Consecutive Quarters
CoStar Group stock’s 78% gross margin in Q1 2026 sits 5 points above Zillow (ZG) at 73% and 9 points above Verisk Analytics (VRSK) at 69%, a gap that has held with remarkable consistency across every quarter in the dataset.
The gap against Verisk is the more structurally significant comparison. Verisk is a mature, highly profitable data-and-analytics subscription business widely regarded as the benchmark for what a scaled information services platform looks like at steady state, and CoStar Group stock carries a higher gross margin than Verisk in every single quarter from June 2024 through March 2026.
The implication for the operating leverage thesis is direct: with a gross profit floor of 78%, CoStar Group stock enters its EBITDA expansion phase with more gross profit per revenue dollar than either peer to absorb the SG&A normalization that management has flagged as the primary driver of margin improvement through 2030.
Is CoStar Group Stock Undervalued in 2026? TIKR’s $72 Model Says the Inflection Has to Hold
TIKR’s mid-case model prices CoStar Group at approximately $72 per share by December 2030, against a current price of $33, implying around 119% total return or roughly 19% annualized over the next 4.5 years.
If CSGP sustains its 13% revenue CAGR through 2030 and net income margins expand toward 18% as Homes.com’s $550 million annual investment tapers, the mid-case path to $72 is the base scenario management has explicitly reaffirmed, producing an IRR of around 16% for investors entering at the current price.
If the Homes.com monetization ramp accelerates faster than the model assumes, pulling net income margins toward 20% and revenue growth toward 15%, the high-case scenario reaches approximately $160 per share by December 2034, producing an IRR of around 20%.
If organic revenue growth slows toward 12% and Homes.com operating losses persist longer than the model assumes, the low-case scenario produces approximately $83 per share by December 2034, still representing around 152% total return from the current price of $33, with an IRR of around 12%.
Is CoStar Group Stock a Buy Right Now?
CoStar Group stock is trading at $33, a price last seen in 2019, despite the business having more than doubled revenue since then and just delivered 60 consecutive quarters of double-digit growth.
The TIKR mid-case model prices CSGP at approximately $72 per share by December 2030, implying around 119% total return.
The investment case requires the Homes.com monetization ramp to continue and operating leverage to persist as SG&A efficiency gains prove structural rather than one-time.
Investors who believe management’s reaffirmed guidance framework have a hard number from the income statement to anchor to.
What Did CoStar Group Say About Homes.com in Q1 2026?
Florance presented data showing the first 11,400 Homes.com members earned an average of $36,400 more in commissions in their first year as subscribers versus the prior year, against an average annual subscription cost of $3,400, an 11x return on investment.
Revenue for Homes.com reached $26 million in Q1, up 58% year-over-year, with the March annual run rate hitting $106 million.
Management confirmed a price increase for new customers on May 1 and said it expects the residential segment to reach profitability in Q2 2026.
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