CoStar Group (NASDAQ:CSGP) plummeted in early morning trading after the company issued guidance for the current quarter that fell short of analysts’ estimates, according to StreetAccount. The move also followed confirmation from News Corp. that the two companies are no longer engaged in discussions regarding a potential sale by CoStar of Realtor.com.
The below-consensus guidance, along with News Corporations' Tuesday announcement that it's no longer in talks to sell its Move real estate unit to CoStar, have resulted in CSGP shares selling off.
However, RBC Capital Markets believes the risk-off sentiment "will be bought given solid momentum in CoStar (Suite) and Multifamily and robust 39% ex-residential margin in FY22/FY23," analyst Ashish Sabadra, who justified CSGP with an Outperform rating, wrote in a note to clients.
"With the Move acquisition overhang lifted and the stock selling off on larger-than-expected residential investment, we believe this creates an attractive long-term buying opportunity," he added. CSGP was down 2.1% year-to-date, but up 20.8% over the past year.
Sabadra's Outperform rating echoed the average Wall Street analyst rating of Buy, but diverged from the Quant rating of Hold.
The company issued its Q4 financials Tuesday, and revealed revenue of $573.35M (+13.1% Y/Y) beats by $3.67M .
The Company expects revenue in the range of $2.46 billion to $2.48 billion for the full year of 2023, vs. consensus of $2.50B.
CSGP shares slid $3.94, or 5.2%, to $72.08.
