DCF Studio

    CSGP · NMS · Real Estate

    CoStar Group, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 8.42

    Market price

    USD 31.82

    Implied upside

    -73.5%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 11.4% of revenue against depreciation of 6.0%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Current EV/EBITDA of 64.7x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 8.42-73.5%
    Exit multiple
    USD 23.60-25.8%
    Market price
    USD 31.82

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -6m134m275mFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 3.8bnUSD 4.2bnUSD 4.6bnUSD 5.0bnUSD 5.5bnUSD 5.8bnUSD 6.2bnUSD 6.5bnUSD 6.7bnUSD 6.9bn+6.9%
    EBITUSD 283.4mUSD 315.7mUSD 348.0mUSD 379.9mUSD 410.4mUSD 438.9mUSD 464.4mUSD 486.3mUSD 503.9mUSD 516.5m+6.9%
    NOPATUSD 223.9mUSD 249.4mUSD 274.9mUSD 300.1mUSD 324.2mUSD 346.7mUSD 366.9mUSD 384.2mUSD 398.1mUSD 408.0m+6.9%
    Add depreciation & amortisationUSD 227.7mUSD 253.5mUSD 279.5mUSD 305.1mUSD 329.6mUSD 352.5mUSD 373.0mUSD 390.6mUSD 404.7mUSD 414.8m+6.9%
    Less capital expenditureUSD -427.5mUSD -459.7mUSD -488.9mUSD -514.0mUSD -534.1mUSD -548.4mUSD -556.4mUSD -557.5mUSD -551.5mUSD -538.6m+2.6%
    Capex, % of revenue11.4%11.0%10.6%10.2%9.8%9.4%9.0%8.6%8.2%7.9%-
    Less increase in working capitalUSD -30.2mUSD -24.9mUSD -25.1mUSD -24.6mUSD -23.6mUSD -22.0mUSD -19.8mUSD -17.0mUSD -13.6mUSD -9.7m-11.8%
    Free cashflow to firmUSD -6.1mUSD 18.2mUSD 40.5mUSD 66.6mUSD 96.1mUSD 128.8mUSD 163.8mUSD 200.4mUSD 237.7mUSD 274.5m-
    Discount factor0.96120.88800.82040.75790.70020.64690.59760.55210.51010.4712-
    Present valueUSD -5.8mUSD 16.2mUSD 33.3mUSD 50.5mUSD 67.3mUSD 83.3mUSD 97.9mUSD 110.7mUSD 121.2mUSD 129.4m-
    Present Value Of The ForecastUSD 703.8m

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.853Reported 0.780, pulled toward 1.0 (Blume)
    Cost of equity8.50%Risk-free + beta x equity risk premium
    Cost of debt6.89%Assumed: risk-free + 200bp (interest expense not reported)
    Market capitalisationUSD 12.8bn91.5% of capital
    Total debtUSD 1.2bn8.5% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.24%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 8.42

    77% of EV

    Forecast FCFF, final year
    USD 274.5m
    Capex at depreciation, working capital in reinvestment
    USD 408.0m
    Less reinvestment at g/ROIC (30.3% of NOPAT)
    USD -123.8m
    Capitalised
    USD 284.3m
    ROIC (WACC floor)
    8.2%
    Terminal value, undiscounted
    USD 5.1bn
    Terminal value, discounted
    USD 2.4bn
    Enterprise value
    USD 3.1bn
    Less net debt
    USD -449.0m
    Equity value
    USD 3.5bn

    Exit at 20.0x EBITDA

    Value per shareUSD 23.60

    93% of EV

    Terminal value, undiscounted
    USD 18.6bn
    Terminal value, discounted
    USD 8.8bn
    Enterprise value
    USD 9.5bn
    Less net debt
    USD -449.0m
    Equity value
    USD 9.9bn

    Spread between methods: 95%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.24%12.0211.8311.6511.4611.28
    7.24%10.109.959.809.659.50
    8.24%8.678.558.428.308.17
    9.24%7.577.477.367.267.15
    10.24%6.706.616.526.436.34

    Outlined: this model. Green text: above today's price of 31.82. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year14.2%7.8%25.4%
    EBIT margin20.7%7.5%25.0%
    Discount rate-8.2%2.8%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.