CoStar Group (CSGP) provides data services, including analytics, information, and marketing to the commercial real estate industry.
The company’s fourth-quarter earnings were recently released. On a year-over-year basis, overall revenues increased by 14% to $507 million. In addition, adjusted profits per share increased 20.7% year-over-year to $0.35 per share.
For the first quarter of 2022, management expects adjusted earnings of $0.27 to $0.28 per share and revenues of $510 million to $515 million.
Let’s look at the risk factors for CoStar Group using the new Tipranks’ Risk Factors tool.
Risk Factors
CoStar Group’s main risk category is Ability to Sell, which accounts for 8 of the total 31 risks identified. The next major CoStar Group risks fall under the Tech & Innovation category, which accounts for 7 risks.
In its recent report, the organization warned investors about one new risk under the Production category.
CoStar announced its intentions to expand its research and technology facility in Richmond, Virginia in December 2021. The corporation notes that putting the strategy into action will need major capital investments over the next few years.
CoStar warns investors that due to issues such as cash flow fluctuations or future growth adjustments, it may not be able to adequately fund this project. Furthermore, the actual capital expenditures required to support the project may differ dramatically from those projected, negatively influencing the company’s operational performance.
Further, CoStar also notifies investors that its cash on hand may be used to fund the construction. However, this would lower the amount of cash available for other business purposes, as well as reduce the company’s capacity to make its planned debt payments, putting its financial situation at risk.
Wall Street’s Take
Turning to Wall Street, the stock has a Strong Buy consensus rating based on 7 unanimous Buys. The average CSGP price target of $77.29 implies 27.5% upside potential to current levels.
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