CoStar Group (CSGP) PT Lowered to $40 at Needham

Needham analyst Mayank Tandon lowered the price target on CoStar Group (NASDAQ: CSGP) to $40.00 (from $50.00) while maintaining a Buy rating.

The analyst comments "CSGP delivered a mixed 2Q, with revenue falling short but EPS coming in above expectations. EBITDA more than doubled Y/Y on personnel cost discipline and AI efficiencies. Guidance was also mixed, with management cutting FY26 revenue below consensus while reaffirming EBITDA and EPS as it prioritizes profitability over near-term growth. The lower revenue outlook reflects restructuring Ten-X, reshaping Homes.com sales, and Apartments.com pricing discipline. Net new bookings of $69 million rose 3% sequentially but declined Y/Y as CoStar focuses on optimizing its sales force. Also of note, residential turned adjusted EBITDA positive for the first time since the Homes.com launch. With the shares expected to open at an ex-cash FY27 P/E multiple of ~15x, we like the risk-reward and maintain our BUY rating. Our target is lowered though to $40."

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