Compass Diversified Holdings (CODI) AI Stock Analysis

• Market Cap: $535.68M
• Dividend Yield: 14.84%
• Average Volume (3M): 802.34K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.28
• Revenue Growth: 6.77%
• EPS Growth: 9.95%
• Country: US
• Employees: 3,340
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): N/A
• Shares Outstanding: 75,235,970
• 10 Day Avg. Volume: 1,004,642
• 30 Day Avg. Volume: 802,340
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 8.18
• Enterprise Value/Revenue: 1.99
• Enterprise Value/Gross Profit: 4.30
• Enterprise Value/Ebitda: 12.75
• 1Y Price Target: $7.50
• Price Target Upside: 11.28% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 60 Neutral
• Price Target: $7.50 ▲(11.28% Upside)

The overall stock score of 60 reflects the company's solid gross profitability and balanced equity structure, offset by high leverage, negative cash flows, and a negative P/E ratio. Technical indicators suggest a neutral market position, while the high dividend yield may appeal to some investors despite sustainability concerns.

Positive Factors

Business Model Strength

CODI's diversified investment strategy across various sectors provides resilience against sector-specific downturns, supporting long-term stability.

Gross Profitability

High gross margins indicate efficient core operations, which can support reinvestment in growth and improve long-term profitability.

Revenue Growth

Consistent revenue growth suggests expanding market reach and product adoption, enhancing the company's ability to generate future cash flows.

Negative Factors

High Leverage

High leverage increases financial risk, especially in volatile markets, potentially limiting the company's ability to invest in growth opportunities.

Negative Cash Flows

Negative cash flows highlight challenges in sustaining operations without external financing, which can strain long-term financial health.

Low Return on Equity

Low ROE suggests inefficiency in generating profits from equity, which can impact investor confidence and limit future capital raising.

Compass Diversified Holdings Business Overview & Revenue Model

Company Description

Compass Diversified is a private equity firm specializing in add on acquisitions, buyouts, industry consolidation, recapitalization, late stage and middle market investments. It seeks to invest in niche industrial or branded consumer companies, manufacturing, distribution, consumer products, business services sector, safety & security, electronic components, food, foodservice. The firm prefers to invest in companies based in North America. It seeks to invest between $100 million and $800 million in companies with an EBITDA between $15 million to $80 million. It seeks to acquire controlling ownership interests in its portfolio companies and can make additional platform acquisitions. The firm prefer to have majority stake in companies. The firm invests through its balance sheet and typically holds investments between five to seven years. Compass Diversified was founded in 2005 and is based in Westport, Connecticut with an additional office in Costa Mesa, California.

How the Company Makes Money

Compass Diversified Holdings generates revenue primarily through the ownership and operation of its portfolio companies. The company earns income from dividends and distributions from these businesses, which are often structured to maximize shareholder returns. Additionally, CODI may benefit from capital appreciation as the value of its investments increases over time. The firm actively pursues strategic acquisitions and partnerships to expand its portfolio, which can lead to increased revenue streams. By focusing on businesses with strong cash flows and growth opportunities, CODI aims to deliver consistent returns to its investors.

Compass Diversified Holdings Financial Statement Overview

Summary

Compass Diversified Holdings shows strength in gross profitability and a balanced equity structure, but faces challenges with high leverage, low ROE, and negative cash flows. Revenue growth is modest, but the company's ability to improve net income and cash generation remains a key area for improvement.

Income Statement

The company shows a strong gross profit margin at 45.5% for 2024, indicating solid profitability from core operations. However, the net profit margin is low at 1.9%, reflecting challenges in translating revenue into net income. Revenue growth from 2023 to 2024 is modest at 6.8%, marked by fluctuating EBIT margins over recent years, currently at 10.5%.

Balance Sheet

With a debt-to-equity ratio of 1.37, the company has relatively high leverage, which could pose risks in volatile market conditions. The return on equity (ROE) is low at 3.3%, indicating limited profitability for shareholders. The equity ratio is reasonably healthy at 32.0%, suggesting a balanced capital structure.

Cash Flow

The company faces challenges with negative free cash flow of -$129.33 million in 2024, a decrease from positive figures in 2023. Operating cash flow to net income ratio is negative, indicating difficulties in converting net income into cash flow. These factors highlight concerns over sustainability of cash flows.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.20B	2.06B	2.01B	1.72B	1.45B
Gross Profit	1.00B	893.32M	783.05M	725.96M	539.67M
EBITDA	341.85M	230.09M	247.10M	193.13M	167.26M
Net Income	12.81M	246.29M	36.39M	114.55M	22.78M
Balance Sheet
Total Assets	4.05B	3.82B	3.85B	3.14B	2.60B
Cash, Cash Equivalents and Short-Term Investments	59.73M	450.48M	61.27M	157.13M	70.74M
Total Debt	1.77B	1.67B	1.83B	1.28B	899.46M
Total Liabilities	2.49B	2.30B	2.49B	1.86B	1.38B
Stockholders Equity	1.30B	1.33B	1.14B	1.11B	1.10B
Cash Flow
Free Cash Flow	-124.34M	22.30M	-92.56M	94.17M	117.86M
Operating Cash Flow	-67.64M	78.08M	-28.29M	134.05M	148.63M
Investing Cash Flow	-422.45M	570.50M	-626.73M	-317.50M	-700.83M
Financing Cash Flow	100.61M	-260.16M	556.88M	273.21M	521.73M

Compass Diversified Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.74
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CODI, the sentiment is Negative. The current price of 6.74 is below the 20-day moving average (MA) of 7.20, below the 50-day MA of 7.00, and below the 200-day MA of 13.65, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 44.36 is Neutral, neither overbought nor oversold. The STOCH value of 28.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CODI.

Compass Diversified Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IRS	68 Neutral	1.04B	4.98	―	7.62%	1.13%	―
CRESY	63 Neutral	608.49M	6.05	―	9.66%	-8.49%	-12.31%
CODI	60 Neutral	$535.68M	―	-4.98%	14.84%	6.77%	9.95%
MATW	53 Neutral	760.23M	-11.69	-12.68%	4.05%	-11.13%	-351.71%
NNBR	53 Neutral	111.16M	-1.96	-23.65%	―	-9.86%	1.22%
FIP	48 Neutral	538.61M	-3.13	-8.06%	1.92%	16.07%	30.39%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Compass Diversified Holdings Corporate Events

Compass Diversified Amends Senior Notes Agreement

Compass Diversified Holdings LLC, a company involved in managing a diverse portfolio of businesses, entered into a Forbearance Agreement on August 29, 2025, with certain note holders to amend terms related to its senior notes due in 2029 and 2032. On September 9, 2025, the company executed supplemental indentures to amend the notes, introducing special payments in kind to note holders, which could impact the company’s financial obligations and stakeholder interests.

The most recent analyst rating on (CODI) stock is a Hold with a $7.50 price target. To see the full list of analyst forecasts on Compass Diversified Holdings stock, see the CODI Stock Forecast page.

Compass Diversified Holdings Delays Quarterly Report Filing

Compass Diversified Holdings (CODI) announced a delay in filing its quarterly report for the quarter ended March 31, 2025, due to concerns about financing, accounting, and inventory practices at its subsidiary, Lugano Holding, Inc. The company has also disclosed non-reliance on its financial statements for 2022, 2023, and 2024. To address these issues, CODI entered into a Forbearance Agreement with note holders to provide time for financial restatements and to prevent defaults under its senior notes. The agreement is expected to allow CODI to complete the restatement of its financial statements, but the company warns of potential adverse effects on its business if these efforts are unsuccessful.

The most recent analyst rating on (CODI) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Compass Diversified Holdings stock, see the CODI Stock Forecast page.

Compass Diversified Extends Forbearance Agreement Amid Investigation

Compass Diversified Holdings, a company involved in managing a diverse portfolio of businesses, announced on July 28, 2025, that it has entered into a second forbearance agreement with its lenders, extending the forbearance period until October 24, 2025. This decision follows the identification of financial irregularities at its subsidiary, Lugano Holdings, Inc., which has led to a delay in filing its quarterly report and a need for financial restatements. The extended agreement increases the company’s revolving credit facility from $40 million to $60 million, ensuring liquidity while the investigation continues. The company remains focused on maintaining strong performance across its other subsidiaries, which are operating normally and generating significant cash flow.

The most recent analyst rating on (CODI) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Compass Diversified Holdings stock, see the CODI Stock Forecast page.

Compass Diversified Announces Quarterly Cash Distribution

On July 2, 2025, Compass Diversified Holdings announced a quarterly cash distribution for its Series A, B, and C Preferred Shares, covering the period from April 30, 2025, to July 30, 2025. This distribution highlights the company’s strong cash flow capabilities despite ongoing investigations, underscoring its robust business model and potential implications for stakeholders.

The most recent analyst rating on (CODI) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Compass Diversified Holdings stock, see the CODI Stock Forecast page.

Compass Diversified Probes Financial Irregularities at Subsidiary

On June 25, 2025, Compass Diversified Holdings announced non-reliance on its financial statements for 2022 and 2023 due to an ongoing investigation into its subsidiary, Lugano Holding, Inc. This follows a similar disclosure regarding 2024’s financial statements. The investigation, which has identified irregularities in Lugano’s financial practices, is progressing as expected, with CODI working to finalize necessary financial restatements. Despite these challenges, CODI’s other subsidiaries remain unaffected, continuing to operate normally with strong financial health. The company emphasizes its ample liquidity and commitment to maximizing long-term stakeholder value.

The most recent analyst rating on (CODI) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Compass Diversified Holdings stock, see the CODI Stock Forecast page.