CSGP

CoStar's top line still looks like a growth story — revenue compounded from $1.94B in FY2021 to $3.25B in FY2025 (+18.7% YoY) at a 78.9% gross margin — but the operating engine has broken. Operating income swung from positive to -$72M (-2.2% margin), net income collapsed 95% to just $7M, and diluted EPS is $0.02, which prices the equity at a nonsensical 1432x P/E. Even on revenue, 3.7x P/S is no longer cheap for a business that just printed essentially zero GAAP profit and -$1,540% YoY operating income growth. The MD&A frames the segment reshuffle to 'product portfolio' reporting as alignment, but it conveniently lands in the same year management absorbed Matterport and Domain and reset spend.

The filing language tells you why margins cratered and warns the pain isn't done. Risk Factors explicitly flag that 'internal and external investments may place downward pressure on our operating margins,' that 'significant costs associated with building our campus in Richmond, Virginia, have impacted and will continue to impact our financial condition,' and that the company 'may be unable to realize the benefits of the Matterport Acquisition or the Domain Acquisition.' The numbers corroborate: D&A jumped 78.9% to $263M as Matterport and the campus hit the P&L, long-term debt sits at $993M, current liabilities grew 35.1% to $746M, and cash fell 65.1% from ~$4.7B to $1.63B as M&A and a $500M buyback drained the war chest. Current assets dropped 57.2% YoY — a balance sheet that was once a fortress is now merely adequate.