On July 29, CoStar declined 13.52% in pre-market trading, trading at $26.15/share, with turnover of $1,189.65. The sell-off was triggered by the company's Q2 earnings report and weak forward guidance released after the prior session's close.

CoStar reported Q2 adjusted EPS of $0.32, beating the consensus estimate of $0.29 and rising 88.24% year-over-year. However, revenue of $925 million fell short of the $928.8 million expected. More critically, Q3 guidance called for revenue of $935 million to $945 million, far below the analyst consensus of $967.5 million, with adjusted EPS guidance of $0.31-$0.34 versus the $0.38 consensus. Full-year revenue outlook was revised to $3.72-$3.76 billion, also trailing the $3.80 billion estimate.

The stock had rallied over 10% in the two prior sessions on optimistic earnings expectations, and the disappointing guidance triggered sharp profit-taking. Institutional sentiment had already turned cautious, with Baird previously downgrading to neutral and RBC warning of lower-than-expected bookings amid sluggish commercial real estate recovery driven by hybrid work trends and elevated borrowing costs.

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