CoStar Soars 6% on Keefe Bruyette Price Target Hike as Zillow, Lennar Rally

CoStar Group (CSGP) shares fell 3.8% after its Commercial Repeat Sale Indices projected a 63% drop in commercial property deliveries by September 2026. The data also indicated softer demand, with net absorption expected to decline. CoStar's stock closed at $27.02, down 58.9% year-to-date and 68.1% below its 52-week high. The company's revenue grew 20.4% year-over-year, but its operating margin turned negative, raising concerns about future profitability.

CoStar Group (CSGP) reported 18.44% revenue growth in Q2 2026, down from 26.89% in Q4 2025, marking two consecutive quarters of deceleration. Management cut full-year revenue guidance but raised adjusted EBITDA guidance by $30 million. Net new bookings fell 26% year over year, attributed to strategic decisions in Ten-X, Homes.com, and Apartments.com. GAAP EBITDA showed significant volatility, contrasting with smoother adjusted figures.

RBC increased its price target on CoStar Group to $34 from $31, maintaining a Sector Perform rating. The stock has a 5-day change of +1.34% and a year-to-date change of +1.08%. BMO Capital also recently adjusted its price target on CoStar to $33 from $31.

CoStar (CSGP) reported Q2 revenue of $925M, up 18.4% YoY, with guidance missing expectations. Fair Isaac (FICO) reported $674.2M, up 25.7%, missing estimates. TransUnion (TRU) reported $1.31B, up 14.9%, beating expectations. CSGP is up 6.4%, FICO down 19.7%, TRU up 8.3% since reporting.

CoStar completed an $800m acquisition of Zonda, expanding into residential construction data. Zillow's Zestimate has median error rates of 1.8% for listed homes and 7.2% for off-market homes. Zillow faced a $881m pre-tax loss in its Homes division and an FTC settlement over a deal with Redfin. NAR settled litigation and amended MLS rules, but data access remains contested. Tech giants plan significant data center investments, with location priorities shifting.

CoStar Group completed an $800M cash acquisition of Zonda, expanding into new-home data. Zonda, with $170M in 2025 revenue, provides data to 3,000+ builders and developers. The deal follows CoStar's strong Q2 2026 results, with revenue up 18% YoY to $925M and residential revenue up 33%. CoStar aims to integrate Zonda's data and builder network with its existing platforms.