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CoStar (CSGP):

  • Writer: Abacus Research
    Abacus Research
  • Jun 16, 2020
  • 1 min read

We wrote up CSGP in 2017. We think there was limited interest in it. Sticker shock on EV/EBITDA puts people off. This is a big mistake.


Once you understand the business is three monopoly-like businesses, with huge pricing power and very limited incremental costs it will become a potential core holding. 

  • Sustainable organic growth of ~15%

  • Incremental margins of ~90%

Execution in marketplaces for the next couple of years will drive results, along with M&A, with the near-term potential that the RentPath deal gets FTC approval.

Potential Upside:     $1072 (+60%) over two years

Sensible Downside: $564 (-15%)


 
 
 

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