CoStar's Core Network Runs at 47% Margins. Is Homes.com Still Driving the Discount?
The Motley Fool
by newsfeedback@fool.com (Bryan White)February 19, 2026
AI-Generated Deep Dive Summary
CoStar Group (NASDAQ: CSGP), a leading data and marketplace platform for commercial real estate (CRE), has experienced a significant stock decline of nearly 50% over the past six months. While investors are primarily focused on the company's challenges in the residential sector, its commercial core remains robust and highly profitable, operating at impressive margins of 47%. This performance highlights the strength of CoStar's network effect, which connects millions of properties with over 230,000 professionals relying on its data to complete real estate transactions. The more users on the platform, the richer and more valuable the data becomes—a self-reinforcing cycle that keeps the business thriving.
The company has quietly built a network similar to industry giants like Visa (NYSE: V) and Mastercard (NYSE: MA), where both sides of the market (property professionals and data seekers) depend on each other. This dynamic ensures high retention rates and scalability, driving margins upward as the platform grows. CoStar's ability to maintain this network effect positions it as a critical player in the CRE industry, despite recent headwinds in its residential division.
While Homes.com, CoStar's foray into the consumer housing market, has been under scrutiny, the article suggests that this segment may still be
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Originally published on The Motley Fool on 2/19/2026