Polen Capital Management, LLC - Focus Growth Composite on CoStar Group, Inc.
Thesis
CoStar remains a holding where Polen says its conviction is intact despite investor concern about elevated Homes.com investment, the timing of margin recovery, and pressure on software and information businesses. Polen says the underlying business continues to show strong revenue growth, healthy bookings, improving profitability, and continued Homes.com momentum. The firm believes CoStar’s proprietary real-estate data, domain expertise, and leading market positions are difficult to replicate. The key debate is timing, with Polen expecting Homes.com spending to translate into more visible earnings power and CoStar to rank among the portfolio’s fastest earnings-per-share growers over the next three to five years.
“This was frustrating for us, particularly after we added to the position in the first quarter, but our conviction remains intact.”
Key risks
- The scale and duration of Homes.com spending
- Delayed margin recovery
- Broader pressure on software and information-based businesses