Is CoStar Group, Inc. overvalued or undervalued?

As of 24 October 2025, the valuation grade for CoStar Group, Inc. has moved from fair to attractive. The company appears to be overvalued based on its high P/E ratio of 283, significantly exceeding peers like VeriSign, Inc. with a P/E of 33.05 and Check Point Software Technologies Ltd. at 53.34. Additionally, CoStar's EV to EBITDA stands at 202.31, which is also much higher than its peers, indicating a premium valuation compared to the industry.
Despite the attractive valuation grade, the company's financial metrics suggest caution, particularly with a negative ROCE of -0.11% and an ROE of only 1.37%. The stock has underperformed against the S&P 500 over the longer term, with a 5-year return of -4.99% compared to the index's 95.99%, which reinforces concerns about its current valuation.