Analyst Note| Yousuf Hafuda |
CoStar Group reported solid fourth-quarter results, with the countercyclical elements of its business more than offsetting the challenges faced as a result of the coronavirus-related recession. Fourth-quarter revenue increased by 19% as compared with the fourth quarter of 2019. Meanwhile, adjusted EBITDA grew by nearly 18% on a year-over-year basis, meaning profitability growth roughly kept pace with revenue growth. CoStar seems to move from strength to strength, with the current crisis that has ravaged many parts of the economy boosting demand for many of its products. With a period of substantial growth already incorporated into our forecast, we are maintaining our $752 per share fair value estimate for wide-moat-rated CoStar.