Is CoStar Group, Inc. overvalued or undervalued?

As of 3 October 2025, the valuation grade for CoStar Group, Inc. has moved from fair to attractive, indicating a potential undervaluation. The company appears overvalued based on its high P/E ratio of 283 and an EV to EBITDA of 202.31, which significantly exceeds its peers such as VeriSign, Inc. with a P/E of 33.05 and Check Point Software Technologies Ltd. with a P/E of 53.34. Additionally, the EV to Sales ratio of 10.70 further supports this assessment of overvaluation.
In terms of performance, CoStar Group's year-to-date return of 18.45% outpaces the S&P 500's return of 14.18%, but its longer-term returns are concerning, particularly the 5-year return of -0.83% compared to the S&P 500's 100.56%. This suggests that while the stock may have short-term appeal, its long-term performance relative to the benchmark raises questions about its valuation sustainability.