Is CoStar Group, Inc. overvalued or undervalued?

As of 19 September 2025, the valuation grade for CoStar Group, Inc. has moved from fair to attractive, indicating a more favorable assessment of its market position. Despite this positive change, the company appears overvalued based on its high P/E ratio of 283, significantly above the peer average, and an EV to EBITDA ratio of 202.31, which also suggests a premium valuation compared to its peers. Additionally, the Price to Book Value stands at 3.87, further indicating potential overvaluation relative to its asset base.
In comparison to peers, VeriSign, Inc. has a P/E of 33.05 and Check Point Software Technologies Ltd. has a P/E of 53.34, both of which are substantially lower than CoStar's. The recent stock performance shows that while CoStar has a year-to-date return of 21.67%, it lags behind the S&P 500's return of 13.31% over the same period, and its 3-year return of 20.85% is significantly lower than the S&P 500's 70.89%. This performance suggests that despite the attractive valuation grade, CoStar Group, Inc. may not be a compelling investment at its current price levels.