Thursday, October 20, 2005

Costar Group reports

{I am currently short shares of CSGP}

Revs for the Q in-line, eps a penny short. Guidance for Q4 calls for revs in-line and a penny upside in EPS. Still think valuation is absurd and don't believe regional expansion will support 25%+ intermediate top-line growth rate. I think 10-15% topline CAGR over next 3 years is more realistic. I also still question the analysts who feel that 25%+ operating margins for CSGP are in the bag (9% in the q if you add back the restructuring charge). From my brief look at the pr, I didn't see any mention of the famously high client retention rate. Must've slipped. I'll listen to the cc this weekend and report back with more detail then.


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