Return on Equity (ROE)
since 2005
Calculation
CoStar Group Inc., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net income (loss)1 | ÷ | Stockholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | 5.38% | = | 100 | × | 369,453) | ÷ | 6,870,121) |
| Dec 31, 2021 | 5.12% | = | 100 | × | 292,564) | ÷ | 5,711,672) |
| Dec 31, 2020 | 4.23% | = | 100 | × | 227,128) | ÷ | 5,375,359) |
| Dec 31, 2019 | 9.25% | = | 100 | × | 314,963) | ÷ | 3,405,593) |
| Dec 31, 2018 | 7.89% | = | 100 | × | 238,334) | ÷ | 3,021,942) |
| Dec 31, 2017 | 4.63% | = | 100 | × | 122,695) | ÷ | 2,651,250) |
| Dec 31, 2016 | 5.14% | = | 100 | × | 85,071) | ÷ | 1,654,213) |
| Dec 31, 2015 | -0.22% | = | 100 | × | (3,465) | ÷ | 1,543,780) |
| Dec 31, 2014 | 2.96% | = | 100 | × | 44,869) | ÷ | 1,513,546) |
| Dec 31, 2013 | 3.20% | = | 100 | × | 29,734) | ÷ | 927,862) |
| Dec 31, 2012 | 1.20% | = | 100 | × | 9,915) | ÷ | 826,343) |
| Dec 31, 2011 | 2.22% | = | 100 | × | 14,656) | ÷ | 659,177) |
| Dec 31, 2010 | 3.48% | = | 100 | × | 13,289) | ÷ | 381,502) |
| Dec 31, 2009 | 5.21% | = | 100 | × | 18,693) | ÷ | 359,006) |
| Dec 31, 2008 | 8.12% | = | 100 | × | 24,623) | ÷ | 303,421) |
| Dec 31, 2007 | 5.66% | = | 100 | × | 15,951) | ÷ | 281,805) |
| Dec 31, 2006 | 4.96% | = | 100 | × | 12,410) | ÷ | 250,110) |
| Dec 31, 2005 | 2.87% | = | 100 | × | 6,457) | ÷ | 224,796) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in thousands
Analysis of the financial performance from 2005 to 2022 reveals a significant expansion in the scale of operations, characterized by substantial growth in both absolute net income and total stockholders' equity, although the return on equity (ROE) has exhibited notable volatility throughout this period.
- Net Income Trajectory
- Net income demonstrated a long-term upward trend, rising from $6.46 million in 2005 to $369.45 million by 2022. A significant anomaly occurred in 2015, when a net loss of $3.47 million was recorded. Following this dip, a sharp recovery was observed in 2016, with earnings accelerating rapidly through 2019 and continuing to climb through 2022.
- Stockholders' Equity Expansion
- There was a consistent and aggressive increase in stockholders' equity, which grew from $224.80 million in 2005 to $6.87 billion in 2022. The growth of the equity base accelerated markedly after 2013, with the total balance increasing more than fourfold between 2014 and 2022, indicating significant capital accumulation.
- Return on Equity (ROE) Fluctuations
- The ROE moved through several distinct phases. An initial improvement phase was observed from 2005 to 2008, peaking at 8.12%. This was followed by a period of contraction between 2009 and 2012, where the ratio declined to 1.20%. After reaching a negative value of -0.22% in 2015, the ROE rebounded strongly to reach a period high of 9.25% in 2019. In the final three years of the analysis, the ratio stabilized, fluctuating between 4.23% and 5.38%.
- Relationship Between Profitability and Capital
- The observed volatility in ROE indicates that earnings growth did not always scale linearly with the expansion of the equity base. Between 2009 and 2012, the growth in equity outpaced net income growth, leading to a compression of the ROE. Conversely, the period between 2016 and 2019 represents the most efficient utilization of equity, as net income grew rapidly enough to drive the ROE to its highest levels despite the continuing increase in total stockholders' equity.
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Comparison to Industry (Industrials)
CoStar Group Inc., ROE, long-term trends, comparison to industry (industrials)
| CoStar Group Inc. | Industrials | |
|---|---|---|
| Dec 31, 2022 | 5.38% | 15.38% |
| Dec 31, 2021 | 5.12% | 15.38% |
| Dec 31, 2020 | 4.23% | 0.24% |
| Dec 31, 2019 | 9.25% | 14.56% |
| Dec 31, 2018 | 7.89% | 17.95% |
| Dec 31, 2017 | 4.63% | 18.24% |
| Dec 31, 2016 | 5.14% | 21.69% |
| Dec 31, 2015 | -0.22% | 16.11% |
| Dec 31, 2014 | 2.96% | 19.68% |
| Dec 31, 2013 | 3.20% | 16.40% |
| Dec 31, 2012 | 1.20% | 17.20% |
| Dec 31, 2011 | 2.22% | 20.10% |
| Dec 31, 2010 | 3.48% | 16.41% |
| Dec 31, 2009 | 5.21% | 12.84% |
| Dec 31, 2008 | 8.12% | 20.74% |
| Dec 31, 2007 | 5.66% | 20.36% |
| Dec 31, 2006 | 4.96% | 32.16% |
| Dec 31, 2005 | 2.87% | 7.80% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).