DailyPlay – Opening Trade (CSGP) – December 4, 2024

CSGP Bullish Opening Trade Signal

Investment Rationale

CoStar Group, Inc. (CSGP) recently broke out above its trading range with strong momentum, outperforming the S&P 500 and signaling potential for further upside toward our $90 target.

CoStar appears modestly undervalued, trading at a premium relative to its peers. However, this valuation is justified by its faster-than-expected growth and superior profitability metrics compared to the industry average. Specifically, CoStar has a forward price-to-earnings (PE) ratio of 72.15x versus the industry average of 29.27x. Its expected earnings per share (EPS) growth stands at an impressive 80.50%, compared to 7.32% for its peers, while expected revenue growth is 13.11% versus the industry average of 2.98%. Additionally, CoStar’s net margins of 6.58% significantly outpace the 2.68% seen across the industry.

CSGP – Daily

Trade Details

Strategy Details

Strategy: Short Put Vertical Spread

Direction: Bullish Credit Spread

Details: Sell to Open 5 CSGP Jan 17 $75/$70 Put Vertical Spreads @ $0.75 Credit per Contract.

Total Risk: This trade has a max risk of $2,125 (5 Contract x $425) based on a hypothetical $100,000 portfolio normally risking 2%. We suggest using 2% of your portfolio value and divide it by $425 to select the # contracts for your portfolio.

Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue higher off recent support.

1M/6M Trends: Bullish/Bullish

Relative Strength: 5/10

OptionsPlay Score: 101

Stop Loss: @ $1.50 (100% loss to value of premium received)

View CSGP Trade

Entering the Trade

Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade. 

PLEASE NOTE that these prices are based on Tuesday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry. 

View CSGP Trade