Compass (COMP) AI Stock Analysis

• Market Cap: $5.01B
• Dividend Yield: N/A
• Average Volume (3M): 8.31M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.37
• Revenue Growth: 21.23%
• EPS Growth: 78.54%
• Country: US
• Employees: 2,566
• Sector: Real Estate
• Sector Strength: 52
• Industry: Software - Application
• EPS (TTM): 0.07
• Shares Outstanding: 525,865,400
• 10 Day Avg. Volume: 8,586,861
• 30 Day Avg. Volume: 8,312,642
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 3.91
• Enterprise Value/Ebitda: 81.61
• 1Y Price Target: $9.57
• Price Target Upside: -0.83% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 64 Neutral
• Price Target: $9.50 ▼(-1.55% Downside)

Compass's overall stock score is driven by strong technical indicators and positive earnings call sentiment, offset by valuation challenges and ongoing profitability issues. The company's strategic initiatives and operational efficiencies provide a positive outlook, but financial performance remains a key area for improvement.

Positive Factors

Earnings

Analyst reiterates a Buy rating on Compass Inc shares following strong quarterly results.

Growth Strategy

Compass Inc achieved record agent growth this quarter, contributing to improved value drivers.

Market Opportunities

The NAR Clear Cooperation Policy could soon end, opening new opportunities for Compass Inc by disrupting traditional gatekeepers and potentially driving consolidation in the industry.

Negative Factors

Market Outlook

Trimmed housing market forecast now expecting a flat market in '25E vs +5% growth prior.

Price Target

Lowering PT to $11 following 1Q results, pushing '25E adj. EBITDA estimates lower by -15%.

Compass Business Overview & Revenue Model

Company Description

Compass, Inc. provides real estate brokerage services in the United States. It operates a cloud-based platform that provides an integrated suite of software for customer relationship management, marketing, client service, operations, and other functionality, as well as brokerage and adjacent services in the real estate industry. The company offers mobile apps that allow agents to manage their business anywhere as well as designs consumer-grade interfaces, an automated workflows for agent-client interactions. The company was formerly known as Urban Compass, Inc. and changed its name to Compass, Inc. in January 2021.Compass, Inc. was founded in 2012 and is headquartered in New York, New York.

How the Company Makes Money

Compass makes money primarily through commission fees earned from real estate transactions. As a brokerage, the company employs or partners with real estate agents who facilitate property sales and rentals. Upon the successful completion of a transaction, Compass receives a percentage of the total sale or rental price as a commission. This commission is typically shared between Compass and the agent involved, based on pre-agreed terms. Additionally, Compass may generate revenue through ancillary services, such as mortgage and title services, which complement their core brokerage operations. The company's investment in technology aims to enhance agent productivity and attract top-performing agents, thereby increasing transaction volume and associated revenue. Significant partnerships with real estate professionals and technology providers further bolster Compass's market presence and revenue generation capabilities.

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	50.10M	-65.60M	-216.40M	-500.30M	-428.50M	-220.10M
Net Income	-53.50M	-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: Positive
• Last Price: 9.65
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COMP, the sentiment is Positive. The current price of 9.65 is above the 20-day moving average (MA) of 8.89, above the 50-day MA of 7.75, and above the 200-day MA of 7.37, indicating a bullish trend. The MACD of 0.45 indicates Positive momentum. The RSI at 69.90 is Neutral, neither overbought nor oversold. The STOCH value of 73.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COMP.

Compass Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LYFT	68 Neutral	$6.82B	76.11	14.07%	―	19.94%	―
INTA	68 Neutral	$3.67B	―	-3.95%	―	17.09%	48.66%
COMP	64 Neutral	$5.01B	―	-9.57%	―	21.23%	78.54%
Sector *	63 Neutral	$7.09B	13.59	-0.50%	6.85%	4.08%	-25.24%
ASAN	51 Neutral	$3.18B	―	-80.55%	―	9.74%	22.36%
ALIT	46 Neutral	$2.04B	―	-29.09%	4.23%	-19.48%	-398.43%
PYCR	―				―

Compass Corporate Events

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.