Question $2-[$Total: $30$ Marks$]$

You have been considering investing in CoStar Group $($NASDAQ: CSGP$).$ You

have decided to do a more thorough analysis of it$.$

i$)$ Provide an industry and company analysis for CSGP $($see supplementary resources

on Blackboard$).$ You should consider the factors which influence CSGP$\text{'}$s share

price $($e$.$g$.$ key competitors, peers, industry influences, company business, key

financial ratios$).$

$(15$ marks$)$

ii$)$ Identify and discuss at least one benchmark that you have chosen to compare

CSGP against. What considerations did you make in your choice of benchmark?

Chart your choice of benchmark against CSGP$\text{'}$s share price over the same period

in Question $1$ and compare the two graphically. What, in your opinion has been the

main driver for the share price movement?

$(10$ marks$)$

iii$)$ Valuation multiples are often used to compare companies quickly. Identify an

appropriate valuation multiple$/$ratio and evaluate if CSGP is over, under or fairly.

valued. Explain the reasoning behind your choice of multiple that you utilised for

your analysis. Are there any limitations of utilising multiples that you might need to

consider?

$(5$ marks$)$