Contrasting CoStar Group (NASDAQ:CSGP) & Sothebys (NASDAQ:BID)

CoStar Group (NASDAQ:CSGP) and Sothebys (NYSE:BID) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Valuation and Earnings

This table compares CoStar Group and Sothebys’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CoStar Group $1.19 billion 18.04 $238.33 million $7.40 79.48
Sothebys $1.04 billion 2.56 $108.63 million $2.48 22.98

CoStar Group has higher revenue and earnings than Sothebys. Sothebys is trading at a lower price-to-earnings ratio than CoStar Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for CoStar Group and Sothebys, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CoStar Group 1 0 8 0 2.78
Sothebys 0 4 1 0 2.20

CoStar Group currently has a consensus target price of $621.56, indicating a potential upside of 5.69%. Sothebys has a consensus target price of $52.00, indicating a potential downside of 8.76%. Given CoStar Group’s stronger consensus rating and higher possible upside, analysts clearly believe CoStar Group is more favorable than Sothebys.

Profitability

This table compares CoStar Group and Sothebys’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CoStar Group 22.48% 10.42% 9.35%
Sothebys 10.47% 28.39% 5.03%

Volatility & Risk

CoStar Group has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500. Comparatively, Sothebys has a beta of 1.97, indicating that its stock price is 97% more volatile than the S&P 500.

Insider and Institutional Ownership

95.8% of CoStar Group shares are held by institutional investors. 2.1% of CoStar Group shares are held by insiders. Comparatively, 16.0% of Sothebys shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

CoStar Group beats Sothebys on 11 of the 14 factors compared between the two stocks.

CoStar Group Company Profile

CoStar Group, Inc. provides information, analytics, and online marketplaces to the commercial real estate industry in the United States and the United Kingdom. The company offers CoStar Property Professional service that offers inventory of office, industrial, retail, and multifamily properties and land. It also provides CoStar COMPS Professional that covers comparable commercial real estate sales information; CoStar Tenant, an online business-to-business prospecting and analytical tool; CoStar Lease Comps, a solution to capture, manage, and maintain lease data; CoStar Lease Analysis, a workflow tool; CoStar Advertising to market a space for lease or a property for sale; CoStar Private Sale Network, which provides custom-designed and branded Websites; and CoStar and CoStar Go CoStar mobile apps. In addition, the company offers CoStar Real Estate Manager, a real estate and asset management, and lease accounting software; CoStar Risk Analytics, a commercial real estate risk management tool; CoStar Brokerage Applications; CoStar Investment Analysis Request, a business intelligence software; and CoStar Investment Analysis Portfolio Maximizer, a real estate portfolio management software. Further, it provides apartment marketing sites, such as Apartments.com, ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, Apartamentos.com, WestsideRentals.com, and Cozy.co; LoopNet Premium Lister and LoopNet Power Listings for commercial real estate professionals; LoopLink, an online real estate marketing and database services suite; Listing Manager, an online listing tool; Realla, a commercial property listings and data management platform; LandsofAmerica, LandAndFarm, and LandWatch online marketplaces for rural land for sale; and BizBuySell and BizQuest online marketplaces for operating businesses for sale. The company has a strategic relationship with Buxton Company. The company was founded in 1987 and is headquartered in Washington, the District of Columbia.

Sothebys Company Profile

Sotheby's operates as an auctioneer of authenticated fine art, decorative art, jewelry, wine, and collectibles in the United States, the United Kingdom, Hong Kong, China, Switzerland, France, and internationally. The company operates in two segments, Agency and Finance. The Agency segment accepts property on consignment; and matches sellers to buyers through the auction or private sale process. It is also involved in the sale of artworks; and operation of an auction house for investment-quality automobiles. The Finance segment offers art-related financing services, such as term loans secured by artworks. In addition, the company provides art advisory service. The company is also involved in the retail wine operations; licensing Sotheby's International Realty and related trademarks; and licensing its Sotheby's brand name for use in connection with the art auction business in Australia, and art education services in the United States and the United Kingdom. Sotheby's was founded in 1744 and is headquartered in New York, New York.

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