Compass (NYSE:COMP) Issues Earnings Results

Compass (NYSE:COMP) posted its quarterly earnings data on Tuesday. The company reported $0.11 earnings per share for the quarter, beating the consensus estimate of $0.08 by $0.03, Zacks reports. The business had revenue of $4.31 billion during the quarter, compared to the consensus estimate of $4.11 billion. Compass had a return on equity of 1.11% and a net margin of 0.17%.

Here are the key takeaways from Compass’ conference call:

• Record Q2 performance: Revenue rose 14% year over year to $4.3 billion, while adjusted EBITDA reached a record $363 million, above the high end of guidance. Free cash flow was $180 million, lifting cash to $694 million and reducing net leverage to 3.3x.
• Compass outperformed the housing market, with brokerage transactions up 7.4% versus 3.5% market growth and gross transaction value up 16% versus 6% market growth. Management attributed the gains partly to its luxury-market exposure and stronger demand in the Bay Area.
• The company accelerated its integration savings, having already actioned its initial $300 million cost-synergy target five months ahead of schedule. It now expects $330 million of actioned synergies by year-end, with 2026 realized savings raised to $220 million, while suggesting the longer-term $500 million target could be exceeded.
• Adoption of Compass’s technology and marketing initiatives is expanding, with the Home Platform reaching nearly 50,000 additional owned-brand agents by September and Coming Soon listings approaching 57% of new Compass listings. Management expects 80% of Compass listings to launch as Coming Soon by the end of Q3 and cited strong traffic gains from the Rocket Redfin partnership.
• Q3 guidance calls for revenue of $3.85 billion to $4.05 billion and adjusted EBITDA of $275 million to $305 million, while full-year operating-expense guidance increased by $50 million, partly due to a recent brokerage acquisition and higher compensation costs. Management also emphasized that its long-term scenarios of up to $2.5 billion in adjusted EBITDA are illustrative rather than formal guidance.

Compass Stock Up 2.5%

COMP stock opened at $12.04 on Wednesday. The stock has a market capitalization of $9.00 billion, a PE ratio of 602.25 and a beta of 2.36. The company has a fifty day moving average of $10.54 and a 200-day moving average of $9.73. The company has a debt-to-equity ratio of 1.11, a quick ratio of 0.84 and a current ratio of 0.84. Compass has a one year low of $6.37 and a one year high of $13.95.

Analysts Set New Price Targets

COMP has been the subject of several research reports. The Goldman Sachs Group reiterated a “neutral” rating on shares of Compass in a research report on Wednesday, May 6th. UBS Group lifted their price objective on shares of Compass from $12.00 to $17.00 and gave the company a “buy” rating in a research note on Friday. Morgan Stanley upped their target price on shares of Compass from $11.00 to $12.50 and gave the company an “equal weight” rating in a report on Wednesday, May 6th. Weiss Ratings upgraded shares of Compass from a “sell (d-)” rating to a “sell (d+)” rating in a research note on Monday, May 11th. Finally, Wells Fargo & Company raised their price target on Compass from $9.00 to $12.00 and gave the stock an “equal weight” rating in a report on Tuesday, July 7th. Two research analysts have rated the stock with a Strong Buy rating, seven have assigned a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average price target of $13.77.

Insider Buying and Selling

In other Compass news, CEO Robert L. Reffkin sold 23,456 shares of the business’s stock in a transaction that occurred on Wednesday, July 1st. The stock was sold at an average price of $12.51, for a total transaction of $293,434.56. Following the transaction, the chief executive officer owned 7,781,204 shares in the company, valued at approximately $97,342,862.04. The trade was a 0.30% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 2.85% of the stock is currently owned by insiders.

Compass Company Profile

Compass, Inc is a technology-driven real estate brokerage firm that provides a full suite of services for home buyers, sellers and renters. Utilizing a proprietary software platform, the company equips its network of licensed real estate agents with data analytics, marketing automation and client relationship tools designed to enhance efficiency and transaction transparency.

Founded in 2012 by Ori Allon and Robert Reffkin, Compass has grown from a single office in New York City to serve more than 300 markets across the United States.