Entering text into the input field will update the search result below

CoStar Group, With Close To $2B In Cash On Hand, To Continue To Deliver Strong Performance

Jun. 09, 2020 1:28 PM ETCoStar Group, Inc. (CSGP)1 Comment
Jon Ball profile picture
Jon Ball


  • CSGP has $1.9B in cash on hand.
  • CSGP continues its acquisition strategy, acquiring Ten-X for $190 million in cash.
  • CSGP’s revenue model is immune to economic cycles.

CoStar Group (NASDAQ: NASDAQ:CSGP) is a provider of commercial real estate information, analytics, and marketing services through its main brands, which include CoStar, LoopNet, Apartments.com, BizBuySell, and LandsofAmerica brands. Though the company supports the real estate industry, its advertising and subscription business models have largely been immune to social distancing rules and the economic slowdown brought on by Covid-19.

Indeed, even when commercial landlords might still be suffering at the moment, CSGP succeeds because real estate investors still need services to source, value, and sell properties. Such investors also need to find buyers. As such, its subscription- and advertising-based models will continue to prove valuable for the company.

According to its Q1 2020 report, LoopNet had its best sales quarter ever and Apartments.com turned in its second-best sales quarter ever.

Strong cash position, on an acquisition streak

CSGP is sitting on over $1.9B in cash, representing an increase of 56% over the same period for 2019.

On May 13, CSGP announced plans to acquire Ten-X for $190 million in cash. Ten-X is a digital platform for brokers to execute transactions and counts all of the top 25 US commercial real estate brokerage firms as its clients.

CSGP intends to integrate the Ten-X digital transaction platform—which includes a digital auction process with online escrow—directly into both LoopNet and CoStar, exposing the properties that brokers are selling on the Ten-X platform to millions of potential global buyers. Ten-X’s current database consists of about 400,000 buyers.

The acquisition of Ten-X seems logical, but it also represents a departure in business model for CSGP. While CSGP has spent over $1B in research, to build and maintain what is considered the largest database of commercial real estate properties—there are 59 data changes per second—CSGP does not handle transactions between buyers and sellers. CSGP makes introductions via its marketplaces, and does sell

This article was written by

Jon Ball profile picture
I'm the principle of the Intrinsic Asset Fund. The fund uses a growth strategy to create a high conviction portfolio. I closely follow the approach of William J. O’Neil, the founder of the Investors' Business Daily newspaper and the famed CANSLIM investing strategy.

Analyst’s Disclosure: I am/we are long CSGP. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (1)

nsm0002 profile picture
Tremendously underfollowed name. Amazing company with a very wide moat and impressive growth (both via acquisition and organic).
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.