BTIG moved CoStar Group (CSGP) to a Buy rating on Tuesday, lifting the firm’s prior Neutral assessment and assigning a price target of $80.00. At the time cited in BTIG’s note, that target represents roughly a 21.6% upside from the stock’s quoted price of $65.81.
The upgrade rests largely on BTIG’s view that CoStar’s sales organization has been refocused and is growing - a change the analyst house expects will accelerate bookings and produce double-digit organic revenue gains, potentially pushing results past current Street expectations. In support of that outlook, BTIG raised its revenue estimates for both the fourth quarter and for fiscal 2026.
Third-party data referenced in the note shows CoStar delivered 14.6% revenue growth over the last twelve months, and the consensus among analysts is for 18% revenue growth in fiscal 2025. BTIG highlighted those trends as part of its case that the company’s top-line momentum can sustain improved performance.
BTIG’s reassessment also reflects a change in stance on CoStar’s residential focus. The firm said it had previously been cautious about the company’s push into residential real estate but now believes that expectations are modest, that investment spending has likely peaked, and that the Homes.com platform is beginning to gain traction. BTIG further pointed to an anticipated AI-driven product update that could resonate with users as an additional potential catalyst.
From a balance sheet perspective, BTIG noted CoStar’s current ratio of 3.12, a measure that indicates liquid assets materially exceed short-term obligations. The firm counted that financial flexibility among the positives supporting the Buy call.
Market performance over recent years remains a cautionary backdrop. The stock has lagged since the pandemic period and has fallen more than 30% from its 2025 high, leaving valuations at levels that BTIG says ascribe little to no value to the residential line of business. Data cited in the report showed a 29.2% decline in the share price over the past six months, and the stock was trading well below its 52-week peak of $97.43.
BTIG flagged two near-term events that could move the shares: the company’s upcoming earnings report, likely in early February, and a major product update for Homes.com that BTIG expects may also arrive in February. Separate scheduling data included in the materials lists CoStar’s next earnings date as February 24, with analysts forecasting the company will remain profitable through the current year.
The firm’s upgrade sits amid a patchwork of responses from other brokerages following CoStar’s full-year 2026 and medium-term guidance. Wells Fargo trimmed its price target to $55 and kept an Underweight rating. BMO Capital lowered its target to $72 while maintaining a Market Perform stance, citing the surprise nature of the guidance announcement. Citizens set a $78 target and maintained a Market Outperform rating, noting CoStar’s guidance for 2026 EBITDA in the range of $740-800 million and flagging expected improvements at Homes.com.
Goldman Sachs reiterated a Buy rating with an $84 target after an investor meeting with management, expressing optimism about Homes.com’s competitive features including voice search and AI capabilities. Keefe, Bruyette & Woods cut their target to $75 but retained an Outperform rating, characterizing the guidance as disappointing yet acknowledging the potential for steady and meaningful earnings expansion.
These varied reactions reflect differing interpretations among analysts of CoStar’s guidance and the near-term trajectory for its residential initiatives. BTIG’s upgrade underscores a more constructive view on sales execution and product momentum, while other firms remain cautious or have adjusted valuations to reflect the new guidance.
Key points
- BTIG upgraded CoStar from Neutral to Buy with an $80 price target, implying a 21.6% upside from $65.81.
- BTIG expects a refocused, expanding salesforce and Homes.com traction to drive double-digit organic revenue growth; the firm raised revenue estimates for Q4 and 2026.
- CoStar’s financial position shows a current ratio of 3.12; analysts cite revenue growth of 14.6% year-over-year and project 18% growth for fiscal 2025.
Risks and uncertainties
- Market valuation has fallen sharply - the stock is down over 30% from its 2025 peak and 29.2% in the past six months - which indicates continued investor skepticism about the residential business and could limit near-term upside.
- Differences in analyst reaction to CoStar’s guidance create uncertainty; several firms lowered targets or maintained cautious ratings, reflecting varying confidence in the company’s medium-term outlook.
- Timing and market reception of the planned Homes.com AI-driven product update are uncertain; although identified as a potential catalyst, its actual impact on bookings and user engagement is not assured.
For readers seeking deeper valuation and growth analysis, referenced research reports and data sets are available from subscription services cited in company and analyst materials.