By Dhirendra Tripathi
Investing.com – CoStar stock (NASDAQ:CSGP) plunged more than 10% Wednesday after a proposed tripling of an investment in its residential segment led analysts to cut their price targets.
The provider of online real estate marketplaces disclosed its fourth-quarter numbers Tuesday, and according to StreetInsider, Needham analyst Mayank Tandon believes the outlook came in below consensus estimates “due to a combination of ongoing softness in the multifamily segment and a significant step-up in investments to drive long-term growth in the residential segment”.
Tandon sees the stock at $70 even as he maintained his buy rating. He had a target of $115 for it. The stock touched a low of $49 earlier in the session and later traded at over $56.
The company plans to invest $300 million to $320 million in residential through the year, at least a triple of what it allocated to the segment last year. The year marked its first full 12 months in the residential property space.
CoStar is targeting annual revenue of $2.15 billion at midpoint of its guidance range. Adjusted profit per share is seen between 95 cents and $1.02.
For the ongoing quarter, adjusted EPS is expected to be 27 cents to 28 cents on revenue of $510 million to $515 million.
RBC analyst cut the price to $60 from $85, while Truist Securities too slashed its target to $70 from $110 earlier.
Net sales bookings in the fourth quarter reached an all-time high of $67 million, founder and CEO Andrew C. Florance said.
Revenue in the fourth quarter rose 14%, to $507 million. Adjusted profit per share was 35 cents, higher than 29 cents in the same period a year ago.