CoStar Beat Estimates — Then Fell 11% After Hours on a $730 Million Deal

CoStar Group beat Wall Street estimates, swung to a profit and raised its full-year outlook on Tuesday — and its stock still fell about 11% after hours. The drop put the commercial real estate data company among the biggest after-hours losers on October 27, as investors focused less on the record quarter just reported and more on a cautious fourth-quarter outlook and a $730 million cash acquisition announced at the same time.

What happened

CoStar reported third-quarter revenue of $952 million for the period ended September 30, 2026, up from $834 million a year earlier. Adjusted earnings were $0.38 a share, topping the FactSet consensus of $0.34, while revenue also came in ahead of the $945.8 million forecast, according to Finimize. On a reported basis, CoStar swung to net income of $74 million, or $0.18 a share, from a net loss of $31 million, or $0.07 a share, a year earlier, with operating income of $84 million versus an operating loss of $51 million, as reported by TradingView / dpa-AFX. For the first nine months, net income was $132 million on revenue of $2.774 billion.

CoStar also announced a definitive agreement to acquire Vexcel Group, an aerial and geospatial imagery company, for $730 million in cash. Market wraps including The Market Today and StocksBreaking's after-hours movers roundup, listed CoStar down about 11% in early after-hours trading alongside that deal news. TradingView put the after-hours price at $28.85, down 9.89% at the time of its report.

Why it's blowing up

The reaction is a classic guidance story. CoStar guided fourth-quarter adjusted earnings of $0.46 to $0.50 a share on revenue of $976 million to $996 million, compared with analyst expectations of about $0.49 a share and $984.5 million. The outlook straddles consensus rather than clearing it, so many investors model the midpoint — or the cautious end — trimming near-term expectations even after a beat.

CoStar did lift its full-year 2026 targets, to adjusted earnings of $1.38 to $1.41 a share on revenue of $3.75 billion to $3.77 billion. That raise was not enough to offset the fourth-quarter question, because markets on earnings night tend to price what comes next, not what just happened.

The Vexcel deal added a second layer of uncertainty. On its earnings call, CoStar described Vexcel as the operator of the world's largest aerial imagery programme, designing its own camera systems in Graz, Austria, flying its own aircraft and collecting more than 60 million images a year across 45 countries, much of it at 7.5-centimetre resolution. Management said Vexcel generated roughly $140 million of revenue in the last 12 months, growing more than 30% on recurring multi-year data contracts, with an adjusted EBITDA margin of around 20%, according to the earnings call transcript published by AlphaStreet. The deal is expected to close in the first quarter of 2027 and to add to adjusted earnings in the first full year after closing — meaning the payoff is real, but it is not immediate, and it depends on integration.

Key facts

• Quarter: Revenue $952 million, up about 14% year on year; adjusted EPS $0.38 versus $0.34 expected.
• Profit swing: Net income $74 million versus a $31 million loss a year earlier; operating income $84 million versus a $51 million loss.
• Guidance: Q4 adjusted EPS guided at $0.46–$0.50 versus about $0.49 consensus; full-year outlook raised to $1.38–$1.41 on $3.75–$3.77 billion of revenue.
• Deal: Vexcel Group to be acquired for $730 million in cash, expected to close in Q1 2027.
• Market move: Shares fell about 11% after hours on October 27, among the session's biggest decliners.

What's next

Investors will now watch three things. First, whether Wednesday's regular session holds the after-hours loss or pares it once analysts publish updated models. Second, any detail on how Vexcel's imagery — which CoStar said underpins services including Microsoft's Bing Maps — will be folded into CoStar's property data, Homes.com and 3D products. Third, whether fourth-quarter trading supports the top end of that $0.46–$0.50 guidance range, because the stock's reaction suggests the burden of proof has shifted to delivery, not to the record third quarter already in hand. This report describes what happened and why markets reacted; it is not a recommendation to buy, sell or hold any security.

FAQ

Why did CoStar stock fall if it beat estimates?

Because its fourth-quarter guidance of $0.46–$0.50 a share only straddled the roughly $0.49 consensus, and investors also had to absorb a $730 million cash acquisition whose earnings benefit is not expected until after it closes.

What were CoStar's Q3 2026 results?

Revenue was $952 million, up about 14% from $834 million a year earlier, with adjusted earnings of $0.38 a share versus $0.34 expected and net income of $74 million versus a $31 million loss a year earlier.

What is Vexcel and how much is CoStar paying?

Vexcel is an aerial and geospatial imagery company that collects more than 60 million images a year across 45 countries. CoStar agreed to buy it for $730 million in cash, with closing expected in the first quarter of 2027.

Did CoStar raise its full-year outlook?

Yes. CoStar lifted its full-year 2026 guidance to adjusted earnings of $1.38–$1.41 a share on revenue of $3.75 billion to $3.77 billion, slightly above prior consensus, even as the stock fell on the fourth-quarter outlook.