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CoStar Group, Inc. (NASDAQ:CSGP) received a lot of attention from a substantial price movement on the NASDAQGS over the last few months, increasing to US$91.80 at one point, and dropping to the lows of US$77.88. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether CoStar Group's current trading price of US$82.57 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at CoStar Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for CoStar Group
What Is CoStar Group Worth?
The stock is currently trading at US$82.57 on the share market, which means it is overvalued by 31% compared to my intrinsic value of $62.90. This means that the opportunity to buy CoStar Group at a good price has disappeared! In addition to this, it seems like CoStar Group’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.
Can we expect growth from CoStar Group?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 75% over the next couple of years, the future seems bright for CoStar Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? It seems like the market has well and truly priced in CSGP’s positive outlook, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe CSGP should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on CSGP for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for CSGP, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.