Compass (COMP) AI Stock Analysis

• Market Cap: $4.26B
• Dividend Yield: N/A
• Average Volume (3M): 9.95M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.35
• Revenue Growth: 21.23%
• EPS Growth: 78.54%
• Country: US
• Employees: 2,566
• Sector: Real Estate
• Sector Strength: 53
• Industry: Software - Application
• EPS (TTM): 0.07
• Shares Outstanding: 525,865,400
• 10 Day Avg. Volume: 14,689,305
• 30 Day Avg. Volume: 9,950,574
• PEG Ratio: 0.35
• Price to Book (P/B): 7.17
• Price to Sales (P/S): 0.52
• P/FCF Ratio: 27.73
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 3.91
• Enterprise Value/Ebitda: 87.93
• 1Y Price Target: $9.38
• Price Target Upside: 17.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 56 Neutral
• Price Target: $8.00 ▲(0.63% Upside)

Compass's overall stock score is driven by strong earnings call performance and operational efficiencies, but is weighed down by ongoing profitability challenges and bearish technical indicators. The negative P/E ratio and lack of dividend yield further impact the valuation negatively.

Positive Factors

Revenue Growth

Strong revenue growth indicates Compass's expanding market reach and successful adoption of its technology-driven real estate solutions, which can enhance long-term business sustainability.

Agent Recruitment

Successful agent recruitment enhances Compass's competitive position by increasing its sales force, which can drive future transaction volumes and market share growth.

Operational Efficiency

Significant operational efficiencies and cost management efforts improve profitability potential, supporting long-term financial health and competitive advantage.

Negative Factors

Profitability Challenges

Ongoing profitability challenges, as indicated by negative margins, can hinder Compass's ability to reinvest in growth and innovation, impacting long-term business viability.

Industry Dynamics

Regulatory and industry challenges can limit Compass's operational flexibility and market competitiveness, potentially affecting its ability to grow and adapt in the long term.

CFO Transition

Leadership changes, such as the CFO transition, can lead to strategic uncertainty and may disrupt financial planning and execution, affecting long-term stability.

Compass Business Overview & Revenue Model

Company Description

Compass (COMP) is a technology-driven real estate brokerage firm that operates primarily in the residential real estate sector. Founded in 2012, the company leverages innovative technology and data analytics to empower real estate agents and enhance the home-buying and selling experience for consumers. Compass offers a range of services, including property listings, marketing tools, and transaction management, aiming to streamline the real estate process and create a seamless experience for both agents and clients.

How the Company Makes Money

Compass generates revenue primarily through commissions earned on real estate transactions facilitated by its agents. Typically, the company takes a percentage of the commission paid by sellers to agents, which can vary based on the market and specific agreements. Additionally, Compass provides premium tools and services to its agents, which may include marketing support, technology platforms, and training resources, for which agents may pay fees or commission splits. The company also engages in strategic partnerships with various tech firms and real estate platforms to enhance its service offerings and expand its market reach, contributing further to its revenue streams.

Compass Financial Statement Overview

Summary

Compass shows mixed financial performance with revenue growth and improved cash flow, but persistent profitability issues and negative return metrics. The company needs to enhance operational efficiency to convert revenue growth into sustainable profits.

Income Statement

Compass shows a mixed financial performance with revenue growth from the previous year, increasing from $5.63 billion to $6.29 billion TTM (Trailing-Twelve-Months), representing a growth rate of 11.76%. However, the company continues to experience losses with a negative net profit margin of -0.85% and EBIT margin of -0.92% TTM, indicating ongoing challenges in achieving profitability. Gross profit margin improved slightly to 16.65% TTM, but overall profitability remains a concern.

Balance Sheet

The balance sheet of Compass reflects moderate financial health. The debt-to-equity ratio stands at 0.65 TTM, which is manageable but indicates leverage. The company has a strong equity ratio of 45.10% TTM, showcasing a solid equity cushion. However, return on equity remains negative at -7.43% TTM due to continuing net losses, reflecting challenges in delivering shareholder value despite a stable capital structure.

Cash Flow

Cash flow analysis for Compass shows positive trends, with free cash flow increasing to $147 million TTM, up from $105.8 million in 2024, indicating a growth rate of 39.01%. Operating cash flow to net income ratio is 3.06 TTM, reflecting better cash generation relative to reported losses. The free cash flow to net income ratio of -2.75 TTM, however, shows reliance on cash flow to support negative earnings, highlighting potential sustainability issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.29B	5.63B	4.88B	6.02B	6.42B	3.72B
Gross Profit	1.05B	994.50M	553.00M	1.08B	1.11B	663.90M
EBITDA	46.50M	-65.60M	-216.40M	-500.30M	-428.50M	-220.10M
Net Income	-53.30M	-154.40M	-321.30M	-589.30M	-492.80M	-270.20M
Balance Sheet
Total Assets	1.60B	1.18B	1.16B	1.53B	1.80B	1.37B
Cash, Cash Equivalents and Short-Term Investments	177.30M	223.80M	166.90M	361.90M	618.30M	440.10M
Total Debt	465.10M	497.60M	533.90M	763.00M	580.70M	512.40M
Total Liabilities	870.70M	765.60M	728.30M	1.01B	953.00M	741.30M
Stockholders Equity	719.90M	409.40M	428.70M	517.10M	843.80M	623.80M
Cash Flow
Free Cash Flow	147.00M	105.80M	-37.10M	-361.80M	-78.70M	-101.40M
Operating Cash Flow	163.80M	121.50M	-25.90M	-291.70M	-28.60M	-58.10M
Investing Cash Flow	-192.00M	-36.60M	-11.70M	-100.10M	-192.50M	-13.40M
Financing Cash Flow	19.70M	-28.00M	-157.40M	135.40M	399.30M	19.90M

Compass Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.95
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COMP, the sentiment is Neutral. The current price of 7.95 is below the 20-day moving average (MA) of 8.98, below the 50-day MA of 8.49, and above the 200-day MA of 7.52, indicating a neutral trend. The MACD of -0.14 indicates Positive momentum. The RSI at 36.18 is Neutral, neither overbought nor oversold. The STOCH value of 11.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for COMP.

Compass Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YOU	82 Outperform	$4.87B	19.63	145.77%	2.10%	19.85%	135.66%
FROG	71 Outperform	$5.85B	-65.43	-10.44%	―	21.97%	-69.32%
BILL	69 Neutral	$5.51B	-337.78	0.61%	―	13.36%	―
QTWO	68 Neutral	$4.67B	1,221.21	0.84%	―	13.34%	―
ZETA	66 Neutral	$4.88B	-106.76	-5.43%	―	40.60%	79.56%
COMP	56 Neutral	$4.26B	―	-9.57%	―	21.23%	78.54%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%

Compass Corporate Events

Compass Appoints Ethan Glass as Chief Legal Officer

Compass has announced a significant leadership change with the appointment of Mr. Ethan Glass as Chief Legal Officer and Corporate Secretary, effective September 8, 2025. This transition follows the announcement on September 9, 2025, that Brad Serwin will step down as General Counsel by the end of the year to start his private practice. Mr. Serwin will remain with the company until December 31, 2025, to ensure a smooth transition and will continue to provide consulting services until March 16, 2026. His departure package includes extended stock option exercise periods, additional health benefits, and continued equity award vesting. The company has also waived repayment obligations under his bonus agreement, acknowledging his contributions over the past five years.

Compass Triggers Early Release Collar in August 2025

Compass, Inc. completed the acquisition of @properties Christie’s International Real Estate on January 13, 2025. As part of the merger agreement, Compass issued 44.1 million shares of its Class A common stock, with adjustments based on stock price performance. An amendment to the original agreement, known as the Early Release Collar, was triggered in August 2025, allowing Compass to deliver 28.4 million shares to certain sellers, reducing shareholder dilution by 9.3%. The remaining shares for non-accelerated sellers will be distributed in installments from January 2026 to 2028, potentially further reducing dilution by 3.3%.

Compass Announces CFO Transition Effective August 2025

Compass announced that its Chief Financial Officer, Kalani Reelitz, will resign effective August 22, 2025. Scott Wahlers, the current Chief Accounting Officer, will assume the role of Chief Financial Officer on the same date. Wahlers, who has been with Compass since 2018, has extensive experience in finance and accounting, having played a significant role in the company’s initial public offering and cost reduction initiatives. His previous experience includes 16 years at WebMD, where he held various finance-related positions.