The firm said a number of growth drivers are in place including the ramp of the larger direct sales force, the acquisition of Apartments.com, and continued penetration of non-broker customers.
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Separately, TheStreet Ratings team rates COSTAR GROUP INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate COSTAR GROUP INC (CSGP) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- COSTAR GROUP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COSTAR GROUP INC increased its bottom line by earning $1.04 versus $0.36 in the prior year. This year, the market expects an improvement in earnings ($3.04 versus $1.04).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet Software & Services industry. The net income increased by 504.1% when compared to the same quarter one year prior, rising from -$2.41 million to $9.74 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 21.2%. Since the same quarter one year prior, revenues rose by 14.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although CSGP's debt-to-equity ratio of 0.16 is very low, it is currently higher than that of the industry average. To add to this, CSGP has a quick ratio of 2.38, which demonstrates the ability of the company to cover short-term liquidity needs.
- The gross profit margin for COSTAR GROUP INC is currently very high, coming in at 78.13%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CSGP's net profit margin of 8.17% significantly trails the industry average.
- You can view the full analysis from the report here: CSGP Ratings Report