On Monday, RBC Capital Markets updated its price target for CoStar Group (NASDAQ:CSGP), a provider of commercial real estate information, analytics, and online marketplaces. The firm increased the stock target to $109 from $95, while retaining an Outperform rating on the company's stock.
The adjustment comes after a report by RBC Elements indicated a significant weekly increase in premium agent memberships on CoStar's residential platform Homes.com. The number of premium agents rose approximately 29% week-over-week to about 5,276.
Notably, the growth was predominantly seen in the top 25% of agents, which witnessed a 34% increase. This segment is crucial for revenue as nearly half of the premium agents belong to this top quartile, and their fees are based on their transaction history.
RBC Capital anticipates that this positive trend will continue, supported by over 1,000 CoStar salespeople actively promoting Homes.com. The firm also suggests that the recent settlement with the National Association of Realtors (NAR) is likely to further boost premium agent memberships in the short term. Moreover, any potential disruptions in the mid-to-long term are expected to significantly enhance the platform's appeal to agents.
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