Now I have enough to write a comprehensive earnings preview.Now I have a comprehensive picture. Let me write the earnings preview.I now have sufficient information to write a thorough, well-sourced earnings preview.# CoStar Group (CSGP) — Q2 2026 Earnings Preview Report Date: July 28, 2026 (after market close) | Call: 5:00 PM ET
This is not a garden-variety earnings preview — CSGP arrives at this print as one of the worst-performing large caps in the market. The stock has fallen roughly 58-59% year-to-date and is trading in the high-$20s, within a few dollars of its 52-week low of $26.68, versus a 52-week high of $97.43. It was also removed from the Nasdaq-100 in May amid the decline, and just two weeks ago the CFO announced his departure — triggering two sell-side downgrades. In short, sentiment is about as negative as it gets for a company still guiding to mid-to-high-teens revenue growth. That gap between the fundamental narrative and market pricing is the central tension investors need to weigh into this report.
On the Q1 call (April 28), CFO Christian Lown laid out a fairly detailed Q2 roadmap: - Revenue: $922M–$932M (+18-19% YoY, ~10% organic at the midpoint) - Commercial revenue: $479M–$484M (+7-9% YoY) - Residential revenue: $443M–$448M (+32-34% YoY, 12-14% organic) - Adjusted EBITDA: $160M–$180M (17-19% margin, ~700bps above Q2 2025) - Commercial Adjusted EBITDA: $160M–$170M (34-35% margin) - Residential Adjusted EBITDA: breakeven to $10M — importantly, management explicitly called for the Residential segment to reach profitability in Q2 2026, a key milestone after years of Homes.com losses - Adjusted EPS: $0.27–$0.30 (409M diluted shares)
Full-year 2026 guidance (reaffirmed/raised at Q1): revenue of $3.78B–$3.82B (16-18% growth), Adjusted EBITDA raised to $780M–$820M (up $30M at the midpoint), and Adjusted EPS raised to $1.32–$1.39.
Street expectations: The Zacks consensus sits at revenue of roughly $929 million (18.95% YoY growth) and EPS of $0.28, squarely within — but toward the upper half of — management's own range. Consensus EPS has been unchanged over the past 30 days despite all the CFO/stock-price noise, and analysts note CSGP has beaten EPS estimates in each of the last several quarters. The average sell-side price target is around $44, roughly 60% above the current share price — a striking disconnect that will likely be scrutinized on the call.
It's worth remembering that the last print was strong operationally. Revenue grew 23% year-over-year to $897 million, Adjusted EBITDA of $132 million doubled year-over-year, and results came in at the high end of or above guidance across most metrics. Net new bookings were $67 million, up 20% year-over-year, and CoStar (the core commercial data/analytics product) grew users 22% to 317,000 with strong broker and tenant sales. LoopNet's new asset-based pricing rollout showed encouraging early signs, and Matterport (acquired in 2025) continued to scale as a differentiator across the portfolio. So the sell-off isn't really about a fundamentals miss — it's about (1) unresolved skepticism on Homes.com's ROI/payback timeline despite management's aggressive ROI data points, (2) capital allocation (repeated large investments/acquisitions while free cash flow to equity is diluted by buybacks and cash M&A), and (3) now a leadership transition question mark.
1. Residential segment profitability — the single most important number. Management explicitly guided Residential Adjusted EBITDA to a range of breakeven to $10 million for Q2, which would mark the segment's first profitable (or near-profitable) quarter after years of heavy Homes.com-driven losses (Residential Adjusted EBITDA was -$85M, -$76M, -$69M, and roughly breakeven in the four quarters of 2025, then -$29M in Q1 2026). Hitting or beating this target — especially with sales-force productivity still described as immature — would be a major proof point for bulls; missing it would validate activist-era concerns.
2. Homes.com trajectory. Watch member growth (35,175 subscribers at Q1-end, up from ~10,000 a year earlier), net new bookings (only $11 million in Q1), ARPU trends following the May 1 price increase for new subscribers, and the promised second-half pricing "boldness" management flagged. Investors will also want updated ROI stats (the Q1 call featured striking data — an average $36,400 commission uplift for subscribers against a $3,400 subscription cost) and commentary on whether the activist-driven "distraction" genuinely subsiding is translating into sales/partnership momentum, particularly around the June Apartmentalize trade show and the Apartments AI launch.
3. Bookings cadence and sales productivity. Analysts pushed hard on this in Q1 — net new bookings have declined sequentially for three quarters even as CoStar has grown its sales headcount materially (2,090 reps at Q1-end, the largest cohort at Homes.com with 570 reps). Management's response was that Q2 is seasonally the strongest bookings quarter and that productivity should build through 2026 as reps mature past year one. This quarter's bookings number will be a critical tell on whether that thesis is playing out.
4. New CFO transition. Christian Lown is stepping down effective July 31, 2026, to pursue an opportunity outside real estate, with Europe chief Robin Rossmann — who cut roughly $51 million of costs (about a quarter of the region's base) while still growing that business double-digits — taking over. Baird downgraded CSGP to Neutral from Outperform (price target cut to $34) and RBC trimmed its target to $34 (Sector Perform), both citing reduced near-term confidence given the timing — a CFO exit roughly two weeks before earnings, without a guidance reiteration. Investors should listen for whether management uses this call to reaffirm or adjust full-year guidance and how Rossmann's "margin expansion" mandate is framed, since cost discipline (AI-driven personnel efficiencies were cited as a key driver of Q1's EBITDA beat) is now a central part of the bull case.
5. Zonda acquisition commentary. On May 29, CoStar announced a definitive agreement to acquire Zonda — a leading new-home construction data, homebuilder software, and marketplace business (NewHomeSource, Livabl) — for $800 million in cash, adding 3,000+ customers with 104% net customer retention and pushing CoStar deeper into the ~$1 trillion homebuilding data opportunity. The deal is expected to close in the second half of 2026, subject to regulatory approval (it has already drawn some antitrust-advocacy scrutiny over data concentration). Watch for closing-timeline updates, integration plans, and how this fits with the in-development "CoStar New Homes" product and expanding homebuilder ad relationships (663 signed data-feed agreements as of Q1) already highlighted on the last call.
6. Capital allocation / buybacks. CoStar repurchased $505 million of stock in Q1 (11.4 million shares, largely via an accelerated share repurchase), part of a $1.5 billion program announced in January, with another ~$195 million planned for the remaining nine months of 2026 (implying ~$700 million total cash outlay this year). With the stock down ~59% YTD, the pace and pricing discipline of buybacks — and whether management leans in harder given the "significantly undervalued" framing many sell-side and buy-side commentators are using — will be a focus area, especially as the company simultaneously commits $800 million of cash to the Zonda deal.
7. Commercial (CoStar/LoopNet) momentum. International growth remains a bright spot — UK revenue was up 25% with bookings up 44% YoY, Canada up 22%, and CoStar France/Australia launches are underway. LoopNet's new asset-based pricing model showed strong early uptake (silver listings above $300/month up 650% quarter-over-quarter). Continued strength here would reinforce that core CRE data/marketplace franchise remains healthy even as the residential bet dominates headlines.
CoStar ended Q1 2026 with $1.215 billion of cash and equivalents (down from $1.633 billion at year-end 2025, largely reflecting the $505 million buyback), $994 million of long-term debt, and total equity of $7.95 billion. With $800 million of cash earmarked for Zonda plus continued buybacks, cash levels and any new financing commentary are worth monitoring, though the balance sheet remains conservatively levered relative to EBITDA.
The setup into this print is unusual: consensus estimates sit comfortably inside management's own guidance ranges, and the underlying commercial real estate franchise continues to post double-digit growth (60 consecutive quarters, per management), yet the stock has been one of the market's worst performers this year on persistent doubts about Homes.com's capital intensity, competitive dynamics versus Zillow, and — most recently — leadership continuity. The single most consequential number to watch is whether Residential Adjusted EBITDA actually crosses into positive territory as guided; a clean beat-and-reaffirm quarter, paired with reassuring commentary from Rossmann on cost discipline and Zonda integration, could help stabilize sentiment. Conversely, any hint of decelerating bookings, softer Homes.com monetization, or hesitation on full-year guidance would likely reinforce the bearish narrative that has driven the stock down roughly 59% year-to-date.