Abstract
CoStar Group will report second-quarter results on July 28, 2026 Post-Mkt; consensus points to revenue growth near the low-20% range with sequential margin improvement and steady adjusted EPS, while investors assess traction in commercial and residential marketplaces.
Market Forecast
The market expects CoStar Group to deliver revenue of 928.86 million US dollars this quarter, an estimated year-over-year increase of 20.30%, with EBIT forecast at 61.34 million US dollars and EPS of 0.287. Based on the company’s prior guideposts, gross margin is expected to remain in the high-70% range, net margin to gradually normalize, and adjusted EPS to grow with operating leverage; commercial real estate information services and residential marketplaces are anticipated to be the principal drivers of top-line expansion. The company’s commercial real estate business remains the largest revenue contributor, while the residential segment is positioned as the most promising growth engine given continued product investments and audience expansion; residential revenue was 425.00 million US dollars last quarter, while commercial real estate revenue was 472.00 million US dollars.
Last Quarter Review
CoStar Group’s prior quarter delivered revenue of 897.00 million US dollars, gross margin of 78.15%, GAAP net income attributable to shareholders of 3.00 million US dollars, a net profit margin of 0.33%, and adjusted EPS of 0.23, up 21.05% year over year. A key highlight was adjusted EPS exceeding the company’s own guidance range as operating expenses grew slower than revenue. By business line, commercial real estate revenue reached 472.00 million US dollars and residential revenue was 425.00 million US dollars, with residential continuing to narrow the gap with the legacy commercial franchise on sustained investment and product releases.
Current Quarter Outlook
Main business momentum
CoStar’s information services and marketplaces in commercial real estate remain the core revenue pillar and the base for operating leverage. Subscription retention, upsell intensity on premium data and analytics, and marketplace ad yield will be key variables this quarter. With a forecast revenue of 928.86 million US dollars and EBIT of 61.34 million US dollars, management’s execution on price actions and cross-sell across the commercial suite could support a stable high-70% gross margin profile and incremental margin expansion. The comparison base from last year eases modestly, enabling mid- to high-teens operating growth if expense discipline holds. Customer additions in flagship products and reduced churn among broker and owner cohorts would translate to resilient recurring revenue, which is central to the thesis for this quarter.
Most promising growth engine
The residential marketplaces are positioned as the fastest-growing area, benefiting from sustained investment into consumer traffic, listing quality, and advertiser tools. Last quarter’s 425.00 million US dollars in residential revenue, approaching the commercial segment’s 472.00 million US dollars, underscores the runway as monetization improves and audience scale compounds. For the quarter at hand, higher traffic conversion and new ad formats are expected to lift yield per partner, while a seasonally robust listing environment should support volume. The critical watch items are paid traffic efficiency and advertiser retention; early signs of better conversion and tighter churn management point to contribution margins that trend upward, supporting the EPS estimate of 0.287 even as the company continues to spend against growth.
Factors most likely to drive the stock
Investors will focus on three levers: revenue beat-and-raise potential, margins versus investment cadence, and color on customer retention and pricing power. A revenue print above the 928.86 million US dollars estimate paired with EBIT near or above 61.34 million US dollars would validate the operating leverage narrative and likely be taken positively. Commentary on the balance between brand and traffic investments in residential and the timing of monetization ramp will set the tone for second-half expectations and can influence multiple expansion. Finally, evidence of durable high-70% gross margin and a path to rebuild net margin from last quarter’s 0.33% GAAP level would reinforce confidence that expanding mix in residential can coexist with earnings growth.
Analyst Opinions
Across recent analyst and institutional previews, the majority stance is bullish, citing durable double-digit revenue growth, expanding residential monetization, and high-70% gross margin resilience. Supportive views highlight the 20.30% revenue growth estimate for the current quarter, the 0.287 EPS forecast implying healthy operating leverage, and the company’s ability to compound subscription and advertising revenue while maintaining strong retention. Analysts also point out that the commercial franchise’s recurring model and the residential marketplace’s audience gains provide visibility into sustained growth, and that any incremental beat on revenue combined with prudent spending could catalyze positive revisions. The bullish camp expects commentary to emphasize disciplined investment pacing and improving advertiser conversion in residential, setting a constructive backdrop for the second half of 2026.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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