TIP809: THE REAL ESTATE DATA EMPIRE MAKING A $5 BILLION BET: COSTAR GROUP

W/ SHAWN O’MALLEY & DANIEL MAHNCKE

TIP809: THE REAL ESTATE DATA EMPIRE MAKING A $5 BILLION BET: COSTAR GROUP W/ SHAWN O’MALLEY & DANIEL MAHNCKE

22 April 2026

Shawn O’Malley and Daniel Mahncke explore CoStar Group (ticker: CSGP), the dominant provider of commercial real estate data and analytics, and assess whether the company’s massive $5 billion bet on Homes.com can successfully crack the residential real estate market dominated by Zillow, or whether this ambitious expansion will destroy shareholder value. CoStar has delivered nearly 60 consecutive quarters of double-digit revenue growth and commands roughly 50% profit margins on its core business.

In this episode, you’ll learn how CoStar built a monopoly-like position in commercial real estate data, why the company is investing $5 billion into Homes.com to compete with Zillow, how CoStar’s acquisition strategy has fueled its growth, what the competitive dynamics look like in residential real estate, and whether CoStar’s stock is attractively priced at current levels, plus so much more!

Attend our Intrinsic Value Conference (for free): From 1-4 pm CT on Friday, May 1st, at Hotel Indigo in downtown Omaha (Address: 1804 Dodge St, Omaha, NE 68102)

  • What to expect? A special live stock pitch from Shawn and Daniel, a Q&A about their investing strategy, and a social hour to network with other like-minded investors!
  • *Please note that while attendance is free and open to the public, it’s on a first-come, first-served basis. We will only have room for about 100 people. However, members of our Intrinsic Value Community will have reserved seating + access to a private dinner with other investors (learn more about our Intrinsic Value Community here).”

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IN THIS EPISODE, YOU’LL LEARN:

  • How CoStar built a dominant, near-monopoly position in commercial real estate data and analytics
  • Why the company has delivered nearly 60 consecutive quarters of double-digit revenue growth
  • How CoStar generates roughly 50% profit margins on its core B2B business
  • Why CoStar is investing $5 billion into Homes.com to take on Zillow and Realtor.com
  • What makes CoStar’s data moat so durable and difficult for competitors to replicate
  • How the company’s acquisition-driven strategy has fueled decades of growth
  • What the competitive landscape looks like in the residential real estate marketplace
  • Whether CoStar’s massive residential bet will pay off or destroy shareholder value
  • How Shawn and Daniel value CoStar and whether CSGP belongs in the Intrinsic Value Portfolio
  • And much, much more!

Disclosure: This episode and the resources on this page are for informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. For full disclosures, see link.

TRANSCRIPT

Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:00] Shawn O’Malley: Think about every commercial building in America, every office tower, every strip mall, every apartment complex, every warehouse. Now imagine that for 40 years, there’s one company that has had people physically visiting each one of those properties, recording what they see, photographing the buildings, and compiling the most comprehensive database to digitalise commercial real estate in the world.

[00:00:23] Daniel Mahncke: That actually sounds incredibly boring, but also incredibly valuable.

[00:00:27] Shawn O’Malley: It’s both. It’s so boring that most investors have probably never heard of CoStar Group, and yet it’s a company that just reported its fifty ninth consecutive quarter of double-digit revenue growth through Covid and through the 2022 rate hike cycle that crushed commercial real estate in transaction volumes.

[00:00:44] Daniel Mahncke: Despite that extraordinary track record, though, the stock has gone basically nowhere for five years, while the S&P is up close to 100%.

[00:00:56] Intro: Since 2014, with more than 200 million downloads. We have interviewed the world’s best investors, studied deeply the principles of value investing, and uncovered many compelling investment opportunities. We focus on understanding businesses and intrinsic value, investing accordingly and sharing everything we learn with you. This show is not investment advice. It’s intended for informational and entertainment purposes only. All opinions expressed by hosts and guests are solely their own, and they may have investments in the securities discussed. Now for your host, Shawn O’Malley and Daniel Mahncke.

[00:01:42] Daniel Mahncke: I have never worked in commercial real estate, and I think it’s fair to say that neither of us invest much into real estate. So when you taught me, Shawn, that today’s pitch was CoStar. My first reaction was, what even is that? And the name kind of sounded familiar to me, but I actually had no idea how big the business actually is and what exactly they do. And apparently it is quite the battleground stock these days.

[00:02:03] Shawn O’Malley: Well, you’re not alone on that because despite being close to a thirty billion dollars company with revenues north of three billion dollars a year, CoStar is genuinely not that well understood by most investors. And, you know, it’s a business that’s enjoyed nearly sixty consecutive quarters of double-digit revenue growth, which is just astounding. And then you have two billion dollars in cash, net of debt, the nearly fifty percent profit margins on its core business. So things look very good.

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