CoStar Group Inc. (NASDAQ:CSGP)

Debt to Equity Ratios

The debt to equity ratio excluding operating lease liability demonstrated a declining trend from 0.18 in 2020 to 0.14 in 2022, indicating a gradual reduction in reliance on debt relative to shareholders' equity. When including operating lease liability, the ratio peaked at 0.21 in 2020 and subsequently decreased to 0.16 by 2022, reflecting improved debt management when lease obligations are accounted for.

Debt to Capital Ratios

Both forms of the debt to capital ratio, excluding and including operating lease liabilities, followed a downward trajectory from 2020 through 2022. The ratio without lease liabilities fell from 0.16 to 0.13, while the ratio including leases declined from 0.17 to 0.14. This suggests enhanced capital structure stability with less reliance on debt components.

Debt to Assets Ratios

The debt to assets ratio remained relatively stable around 0.14 in 2020 and 2021 before declining to 0.12 in 2022 when excluding operating lease liabilities. Including operating lease liabilities, the ratio similarly declined from 0.16 in 2020 to 0.13 in 2022. This trend indicates a modest decrease in overall debt relative to total asset base.

Financial Leverage

Financial leverage increased from 1.10 in 2018 to a peak of 1.29 in 2020, followed by a slight reduction to 1.22 by 2022. This pattern indicates a temporary increase in the use of debt in the capital structure, with a recent move toward de-leveraging.

Interest Coverage

Interest coverage showed a notable decline from very high levels in 2018 and 2019 (101.36 and 150.5 respectively) to significantly lower levels around 13.5 in 2021 and a slight improvement to 16.05 in 2022. This decline indicates a reduction in the company’s capacity to cover interest expenses from operating earnings over the analyzed period, although coverage remains positive and showed modest recovery at the end.

Fixed Charge Coverage

Fixed charge coverage decreased from 10.18 in 2018 to a low of 5.96 in 2020, but subsequently improved to 8.38 by 2022. This suggests that while the ability to cover fixed charges weakened initially, the company managed to partially restore its coverage ratio in later years, enhancing its ability to meet fixed financial obligations.

Total debt

The total debt figures for the company were not reported until December 31, 2020. From that point, total debt remained relatively stable, showing a slight increase from 986,715 thousand US dollars in 2020 to 987,944 thousand in 2021, and further to 989,210 thousand in 2022. This indicates minimal change in the company's leverage from a debt perspective over the three-year period.

Stockholders’ equity

Stockholders’ equity demonstrated a consistent upward trend across all reported years. Starting at 3,021,942 thousand US dollars at the end of 2018, equity increased steadily each year, reaching 3,405,593 thousand in 2019, 5,375,359 thousand in 2020, 5,711,672 thousand in 2021, and 6,870,121 thousand in 2022. This growth reflects a strengthening equity base over the five-year period, with a particularly notable increase between 2019 and 2020.

Debt to equity ratio

The debt to equity ratio data is available starting from 2020. Over the three reported years, the ratio declined slightly from 0.18 in 2020 to 0.17 in 2021, and further down to 0.14 in 2022. This trend suggests that the company has been reducing its relative debt burden compared to its equity, indicating an improving balance sheet leverage position.

Total Debt (Including Operating Lease Liability)

The total debt increased significantly from 149,823 thousand US dollars in 2019 to 1,124,692 thousand US dollars in 2020. Following this sharp rise, the total debt remained relatively stable with a slight decrease in the subsequent years, amounting to 1,113,582 thousand US dollars in 2021 and 1,101,266 thousand US dollars in 2022. This indicates a substantial increase in leverage starting in 2020, followed by a period of stabilization.

Stockholders’ Equity

The stockholders' equity demonstrated a consistent upward trend throughout the period. Beginning at 3,021,942 thousand US dollars in 2018, it increased steadily to 3,405,593 thousand US dollars in 2019. Between 2019 and 2020, equity rose considerably to 5,375,359 thousand US dollars, followed by continuous growth to 5,711,672 thousand US dollars in 2021 and reaching 6,870,121 thousand US dollars in 2022. This steady increase suggests strengthening of the company's net worth over the years.

Debt to Equity Ratio (Including Operating Lease Liability)

The debt to equity ratio was very low at 0.04 in 2019, then increased sharply to 0.21 in 2020, reflecting the significant rise in total debt relative to equity during that year. Subsequently, the ratio decreased to 0.19 in 2021 and further to 0.16 in 2022, indicating improvement in the balance between debt and equity, with equity growth outpacing debt increments or a reduction in debt levels. Overall, the leverage ratio remains low, signaling a conservative leverage profile despite the spike in debt observed in 2020.

Total Debt

The total debt remained unreported for the years 2018 and 2019 but became available starting in 2020. From 2020 to 2022, total debt showed very minimal growth, increasing slightly from approximately 986.7 million US dollars in 2020 to approximately 989.2 million US dollars in 2022. This indicates a relatively stable debt position over the three-year period.

Total Capital

Total capital demonstrated a significant increase over the five-year span from 2018 to 2022. It rose from approximately 3.02 billion US dollars in 2018 to nearly 7.86 billion US dollars in 2022. Notably, there was a substantial jump between 2019 and 2020 when total capital almost doubled, increasing from approximately 3.41 billion to 6.36 billion US dollars. Growth continued in the subsequent years but at a slower pace.

Debt to Capital Ratio

The debt to capital ratio was available starting in 2020 and exhibited a gradual declining trend through 2022. Specifically, it decreased from 0.16 in 2020 to 0.13 in 2022. This trend suggests that the proportion of debt relative to total capital has been decreasing, reflecting either a reduction in debt reliance or an increase in overall capital, or both. Given the stability in total debt alongside the growth in total capital, the latter seems to be the primary contributing factor.

Total Debt (including operating lease liability)

From 2019 to 2022, the total debt exhibited a significant increase in 2020, rising from approximately $150 million in 2019 to about $1.12 billion. After this sharp rise, the debt level remained relatively stable through 2021 and 2022, with slight decreases to around $1.11 billion and $1.10 billion respectively.

Total Capital (including operating lease liability)

Total capital grew consistently over the observed period. It increased from roughly $3.55 billion in 2019 to $6.50 billion in 2020, followed by moderate growth in 2021 and 2022, reaching approximately $6.83 billion and $7.97 billion respectively. This indicates ongoing capital expansion throughout the years.

Debt to Capital Ratio (including operating lease liability)

The debt to capital ratio experienced a noticeable rise in 2020, moving from 0.04 in 2019 to 0.17, reflecting increased leverage corresponding to the spike in total debt. Subsequently, the ratio decreased slightly to 0.16 in 2021 and further to 0.14 in 2022, suggesting a modest reduction in leverage despite continued growth in total capital.

Total debt

Data for total debt is available from 2020 onwards, showing a relatively stable pattern with values around 987 million US dollars each year from 2020 to 2022. This indicates that the company's debt levels remained consistent over this three-year period without significant increase or decrease.

Total assets

The total assets have exhibited a strong upward trend throughout the entire period from 2018 to 2022. Beginning at approximately 3.31 billion US dollars in 2018, assets increased steadily to 3.85 billion in 2019, followed by a significant jump in 2020 to nearly 6.92 billion. This growth continued, reaching 7.26 billion in 2021 and further to 8.40 billion in 2022. Overall, the company more than doubled its asset base over this five-year period, indicating expansion and possibly increased investment or acquisition activity.

Debt to assets ratio

The debt to assets ratio was recorded only from 2020 onwards, exhibiting a slight decline over the three years available. It remained stable at 0.14 in both 2020 and 2021 before declining to 0.12 in 2022. This suggests that, proportionally, the company’s liabilities have decreased in relation to its asset base, reflecting a potentially stronger balance sheet position despite stable nominal debt levels.

Total Debt (including operating lease liability)

The total debt significantly increased from 149,823 thousand US dollars at the end of 2019 to a peak of 1,124,692 thousand US dollars at the end of 2020. It then slightly decreased and stabilized in the following years, with reported amounts of 1,113,582 thousand US dollars in 2021 and 1,101,266 thousand US dollars in 2022.

Total Assets

Total assets demonstrated a consistent upward trend over the entire period. The value rose from 3,312,957 thousand US dollars in 2018 to 8,402,470 thousand US dollars in 2022. The largest increase occurred between 2019 and 2020, when total assets nearly doubled from 3,853,986 to 6,915,420 thousand US dollars. Growth continued in the subsequent years but at a slower pace.

Debt to Assets Ratio (including operating lease liability)

The debt to assets ratio reflected an increase from 0.04 in 2019 to 0.16 in 2020, indicative of increased leverage during that year. The ratio then trended downward in the following years, declining to 0.15 in 2021 and further to 0.13 in 2022. This suggests a modest reduction in leverage relative to assets after the peak in 2020.

Total assets

The total assets of the company exhibited a consistent upward trend during the period from 2018 to 2022. Starting at approximately $3.31 billion in 2018, total assets increased to around $8.40 billion by the end of 2022. The most significant acceleration occurred between 2019 and 2020, where assets nearly doubled from roughly $3.85 billion to $6.92 billion, followed by steady growth in the subsequent years.

Stockholders’ equity

Stockholders' equity also displayed a strong growth pattern over the five-year period. Beginning at about $3.02 billion in 2018, equity rose steadily each year to reach approximately $6.87 billion by 2022. The largest annual increase in equity was registered between 2019 and 2020, corresponding with the substantial asset expansion in the same period. Equity growth appears to sustain a consistent pace afterward.

Financial leverage

The financial leverage ratio, which is calculated as total assets divided by stockholders’ equity, showed modest fluctuation over the years. It started at 1.10 in 2018, increased to a peak of 1.29 in 2020, then gradually declined to 1.22 by 2022. This suggests that while the company increased its use of debt relative to equity around 2020, the reliance on leverage somewhat decreased in the following years, reflecting a potential strengthening of the equity base or controlled debt growth.

The financial data over the five-year period demonstrates notable fluctuations and trends in earnings before interest and tax (EBIT), interest expense, and interest coverage ratio.

Earnings before interest and tax (EBIT)

The EBIT showed a general upward trend from 2018 to 2022, with an initial increase from 286,845 thousand US dollars in 2018 to 393,564 thousand US dollars in 2019. However, in 2020 the EBIT declined significantly to 292,774 thousand US dollars. Following this dip, the EBIT recovered strongly in 2021 and continued its upward trajectory in 2022, reaching 518,782 thousand US dollars. This pattern indicates volatility in operating earnings with a strong recovery in the last two years.

Interest Expense

Interest expense remained relatively low and stable during 2018 and 2019 at approximately 2,830 and 2,615 thousand US dollars, respectively. In 2020, there was a sharp increase in interest expense to 21,794 thousand US dollars, which further rose to 32,316 thousand US dollars in 2021 and remained nearly flat at 32,325 thousand US dollars in 2022. This significant increase from 2020 suggests increased borrowing or higher interest rates during that period.

Interest Coverage Ratio

The interest coverage ratio was very high in 2018 and 2019, at 101.36 and 150.5 times, respectively, indicating a very comfortable ability to cover interest expenses from EBIT. However, this ratio dropped drastically to 13.43 in 2020 corresponding with the spike in interest expense and the decline in EBIT. The ratio remained relatively steady around 13.5 in 2021 and improved moderately to 16.05 in 2022. Despite being significantly lower than the early years, the ratio suggests that the firm maintained a good level of ability to cover its interest obligations in the last three years.

Overall, the data reveals a period of initial growth in earnings with low interest expenses, followed by a challenging environment starting in 2020 with higher interest costs and reduced EBIT. Nevertheless, the company appears to have managed the increased interest burden effectively while demonstrating recovery and strong growth in operating earnings through 2021 and 2022.

The financial data reveals several key trends in the company's earnings before fixed charges and tax, fixed charges, and fixed charge coverage over a five-year period.

Earnings Before Fixed Charges and Tax

This metric showed an overall upward trend, increasing from approximately 315 million USD in 2018 to over 552 million USD by the end of 2022. Despite a dip in 2020, the earnings demonstrated strong recovery and growth in subsequent years, reaching a peak in 2022. This pattern suggests increasing operational profitability or revenue growth after subtracting fixed costs.

Fixed Charges

Fixed charges remained relatively stable between 2018 and 2019, around 30 million USD, but experienced a sharp increase in 2020, more than doubling to approximately 55 million USD. This elevated level persisted through 2021 and 2022, fluctuating only slightly but remaining significantly higher than the pre-2020 period. The increase in fixed charges could indicate higher debt servicing costs, lease obligations, or other fixed financial commitments.

Fixed Charge Coverage Ratio

The coverage ratio, which measures the ability to meet fixed charges from earnings, was robust in 2018 and 2019, with values above 10 and nearly 14 respectively. However, it dropped markedly in 2020 to below 6, reflecting the increased fixed charges and reduced earnings before fixed costs and tax that year. Recovery is observed from 2021 onwards, with the ratio rising to slightly above 8 in 2022, indicating improved but not fully restored coverage compared to earlier years.

In summary, the data describes a period of substantial growth in earnings offset by significantly increased fixed charges from 2020 onward. Although the company's ability to cover these fixed charges weakened sharply in 2020, it improved in subsequent years, signaling resilience and strengthening financial stability despite elevated obligations.