CoStar (CSGP) Stock Jumped 8% Then Fell After Q3 2026 Earnings as Bookings Dropped to $37 Million

CoStar Group stock jumped 8.25% in the first minute after its third-quarter 2026 results on Tuesday, October 27, then gave it all back and more. The release reached the MoveSurge news feed at 16:05:15 ET with the stock at $32.01. A minute later it traded at $34.65; thirteen minutes after the headline it was at $29.89, down 6.62% from the close. The first move followed the headline numbers: record revenue of $952 million, adjusted EBITDA that doubled to $229 million and a higher profit forecast. The reversal came as investors read the rest of the report, which showed net new bookings of $37 million against $84 million a year earlier and revenue growth slowing to about 10% in the fourth quarter.

The stock had already closed the regular session at $32.01, down 5.01%, before the report. Investing.com later reported after-hours declines of as much as 12%.

Bookings are the number CoStar's growth depends on

Net new bookings measure the yearly value of subscription contracts signed in a quarter, after cancellations. They turn into revenue in later quarters, so a weak bookings figure tells investors that revenue growth will be harder to hold. CoStar's $37 million was less than half the year-earlier figure. Chief executive Andy Florance said bookings were below the company's own expectations and blamed economic headwinds and a sales force that grew more slowly than planned, Real Estate News reported. Sales headcount is down about 10% from a year earlier, to roughly 2,000 people.

The revenue forecast tells the same story. CoStar expects fourth-quarter revenue of $976 million to $996 million, growth of about 10% at the midpoint. Revenue grew 14% in the third quarter, and the company slightly raised its full-year range to $3.75 billion to $3.77 billion.

Profit is rising because CoStar is spending less

CoStar spent heavily to build Homes.com, its home-listing site, and says it is now leaving that period of investment. Selling and marketing expenses fell to $366 million in the quarter from $418 million a year earlier, and general and administrative costs fell to $138 million from $157 million. That is why adjusted EBITDA doubled while revenue grew 14%. Florance said the company expects about $150 million of cost savings this year and has found at least $200 million more to take out over the next 12 to 18 months, and he kept a 2028 adjusted EBITDA target of $1.25 billion.

Adjusted EPS of $0.38 beat the $0.34 analysts expected, according to Investing.com. CoStar raised its full-year adjusted EBITDA forecast by $30 million at the midpoint, to $820 million to $840 million, and expects adjusted EPS of $1.38 to $1.41.

The Vexcel purchase and CoStar's cash

CoStar also agreed to buy Vexcel, an aerial imagery company, for about $730 million in cash. Vexcel had more than $140 million of revenue over the past twelve months, up more than 30%, with an adjusted EBITDA margin of about 20%, according to Investing.com. CoStar will pay from cash on hand and its revolving credit line and expects to close in the first quarter of 2027. The company ended September with $500 million of cash, down from $1,633 million at the end of 2025, after spending $668 million on share repurchases and $789 million on acquisitions in the first nine months of the year. Florance said Vexcel and the earlier purchase of Zonda add proprietary data that CoStar can use in its AI products.