CoStar Group: The real-estate enabler

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Mention “real estate” around stock traders, and many are likely to cringe. But there are some bright spots amid the rubble of the subprime lending fiasco and the burst housing bubble, and CoStar Group (Nasdaq:CSGP) could be one of them.

The Bethesda, Md.-based company celebrated last year its 20th anniversary of providing data to the commercial real-estate sector, which undeniably has been hurt by a wounded U.S. economy. By some measures, though, commercial has fared better than residential.

While CoStar Group is not on the front lines searching for a buyer, it is an enabler, dishing up data to connect buyers and sellers.

Analysts who follow CoStar have a generally favorable outlook, despite the sluggish real estate demand. In a recent tally by Thomson Reuters, of the six analysts surveyed, two rated CoStar a “strong buy,” one had it at “buy,” with the other three at “hold.” The Thomson median price target is $56.

However on Tuesday, Needham & Co.’s Jonathan Maietta cut CoStar to “buy” from “strong buy” based on current valuation, but kept his price target at $65.

Since the start of the year, CoStar Group’s share price has meandered closer to its 52-week high of $62.88, set last Oct. 11, while distancing itself from the 52-week low of $35.94 hit on Feb. 7. CoStar Group closed Friday at $53.86.

In its 2007 annual report, CoStar Group calls itself “the leading provider of information services to the commercial real estate industry in the United States and United Kingdom,” backing up that assertion by stating that it offers “the most comprehensive commercial real estate database available, [and has] the largest research . . .

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