Emerald (NYSE:EEX) vs. CoStar Group (NASDAQ:CSGP) Critical Analysis

CoStar Group (NASDAQ:CSGP) and Emerald (NYSE:EEX) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitability, institutional ownership and valuation.

Institutional and Insider Ownership

96.6% of CoStar Group shares are held by institutional investors. Comparatively, 14.9% of Emerald shares are held by institutional investors. 1.6% of CoStar Group shares are held by insiders. Comparatively, 11.5% of Emerald shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and target prices for CoStar Group and Emerald, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CoStar Group	0	4	10	0	2.71
Emerald	0	0	2	0	3.00

CoStar Group presently has a consensus target price of $93.25, indicating a potential upside of 18.56%. Emerald has a consensus target price of $7.90, indicating a potential upside of 62.89%. Given Emerald’s stronger consensus rating and higher possible upside, analysts clearly believe Emerald is more favorable than CoStar Group.

Volatility & Risk

CoStar Group has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Emerald has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500.

Valuation & Earnings

This table compares CoStar Group and Emerald”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CoStar Group	$2.46 billion	13.13	$374.70 million	$0.44	178.75
Emerald	$382.80 million	2.57	-$8.20 million	($0.54)	-8.98

CoStar Group has higher revenue and earnings than Emerald. Emerald is trading at a lower price-to-earnings ratio than CoStar Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares CoStar Group and Emerald’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CoStar Group	6.57%	3.53%	2.88%
Emerald	-5.29%	-13.26%	-1.92%

Summary

CoStar Group beats Emerald on 10 of the 14 factors compared between the two stocks.

About CoStar Group

CoStar Group, Inc. provides information, analytics, and online marketplace services to the commercial real estate, hospitality, residential, and related professionals industries in the United States, Canada, Europe, the Asia Pacific, and Latin America. The company offers CoStar Property that provides inventory of office, industrial, retail, multifamily, hospitality, and student housing properties and land; CoStar Sales, a robust database of comparable commercial real estate sales transactions; CoStar Market Analytics to view and report on aggregated market and submarket trends; and CoStar Tenant, an online business-to-business prospecting and analytical tool that provides tenant information. It also provides Leasing, a tool to capture, manage, and maintain lease data; CoStar Lease Analysis; Public Record, a searchable database of commercially zoned parcels; CoStar Real Estate Manager, a real estate lease administration, portfolio management, and lease accounting compliance software solution; and CoStar Risk Analytics and CoStar Investment. In addition, it offers apartment marketing sites, such as ApartmentFinder.com, ForRent.com, ApartmentHomeLiving.com, WestsideRentals.com, AFTER55.com, CorporateHousing.com, ForRentUniversity.com, Apartamentos.com, and Off Campus Partners; LoopNet Premium Lister; LoopNet Diamond, Platinum, and Gold Ads; LandsofAmerica.com, LandAndFarm.com, and LandWatch.com for rural land for-sale; BizBuySell.com, BizQuest.com, and FindaFranchise.com for operating businesses and franchises for-sale; Ten-X, an online auction platform for commercial real estate; and HomeSnap, an online and mobile software platform, as well as Homes.com, a homes for sale listings site. The company was founded in 1987 and is headquartered in Washington, the District of Columbia.

About Emerald

Emerald Holding, Inc. operates business-to-business (B2B) trade shows in the United States. The company provides B2B trade show franchises; and B2B print publications and digital media products, which provide industry specific business news and information across various sectors. It also offers B2B e-commerce and digital merchandising solutions to manufacturers and retailers through Elastic Suite and Bulletin platforms. The company serves retail, design, technology, equipment, and safety and security. Emerald Holding, Inc. was incorporated in 2013 and is headquartered in New York, New York.