Shares of CoStar Group (CSGP) rocketed 39.6% to $39.97 in after-hours trading on June 25, just hours after the stock closed at $28.64 — near its 52-week low — following Wells Fargo's latest price-target cut. The violent reversal raises a fundamental question: has the selloff in this real estate data giant finally overshot reality?

  • Wells Fargo Has Cut Its Target Five Times Since November, and the Stock Keeps Falling Past It. Wells Fargo lowered its price target on CoStar to $26 from $33 and kept an Underweight rating. This is the fifth consecutive reduction by analyst Jason Haas, who cut from $60 to $55 in January, then to $48 in February, and to $33 in April. The stock is now down 54% year-to-date and has cratered from a 52-week high of $97.43 — a wipeout that has erased roughly $25 billion in market value. At $28.64, the regular-session close already sat below Wells Fargo's new target, suggesting the bear case was fully priced in.

  • The Numbers Tell a Different Story Than the Stock Chart. CoStar posted Q1 2026 revenue of $897 million, up 23% year over year, with adjusted EBITDA doubling and adjusted earnings per share rising to $0.23.

Management guided full-year adjusted EPS of $1.32 to $1.39, meaning at $28.64 the stock traded at roughly 21 times forward earnings — cheap by CoStar's historical standards. The company also targets about 15% compound annual revenue growth through 2028 and $1.25 billion in adjusted EBITDA by then.

  • Google and Homes.com Remain the Twin Headaches. Google's push into home listings in June sparked what analysts called "Portal Wars," pressuring both Zillow and CoStar shares. Meanwhile, CoStar plans to cut its net investment in Homes.com — its money-losing residential portal — by more than $300 million in 2026, but heavy spending and rising competition in residential portals could continue to pressure margins.

  • A $1.5 Billion Buyback and the Zonda Deal Could Provide a Floor. CoStar authorized a $1.5 billion share repurchase program following a completed $500 million buyback in 2025.

Investors are also watching the pending $800 million cash acquisition of Zonda, which would expand CoStar into new-home data and software. At a market cap near $12 billion, the buyback alone represents more than 12% of outstanding shares — a meaningful prop if management executes aggressively.

The after-hours spike could be short-covering and bargain hunting after extreme overselling, but with earnings due July 20, the next few weeks will test whether this is a true inflection or a false dawn.