Compass, Inc. (NYSE: COMP)

Sector: Real Estate Industry: Real Estate Services CIK: 0001563190
Market Cap 6.69 Bn
P/B 8.65
P/E -118.64
P/S 1.01
ROIC (Qtr) -4.72
Div Yield % 0.00
Rev 1y % (Qtr) 23.56
Total Debt (Qtr) 481.00 Mn
Debt/Equity (Qtr) 0.62

About

Compass, Inc., known by its stock symbol COMP, is a prominent player in the real estate technology industry. The company has developed a comprehensive platform that supports residential real estate agents in delivering exceptional service to their clients. This platform encompasses a suite of cloud-based software solutions designed specifically for the real estate industry, covering customer relationship management, marketing, client service, and other essential functionalities. The core of Compass's business revolves around providing an integrated...

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Price action

Investment thesis

Bull case

  • Strong operating cash flow of 201.90M provides robust 0.42x coverage of total debt 481M, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 201.90M provides exceptional 22.69x coverage of interest expenses 8.90M, showing strong debt service capability.
  • Robust free cash flow of 187.80M exceeds capital expenditure of 14.10M by 13.32x, indicating strong organic growth funding capability.
  • Tangible assets of 862.30M provide robust 6.48x coverage of other current liabilities 133.10M, indicating strong asset backing.
  • Operating cash flow of 201.90M fully covers other non-current liabilities 31.70M by 6.37x, showing strong long-term stability.

Bear case

  • Operating cash flow of 201.90M barely covers its investment activities of (192.80M), with a coverage ratio of -1.05, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (192.80M) provide weak support for R&D spending of 227.60M, which is -0.85x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 170.30M provide limited coverage of acquisition spending of (178.70M), which is -0.95x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 201.90M shows concerning coverage of stock compensation expenses of 176.40M, with a 1.14 ratio indicating potential earnings quality issues.
  • Operating cash flow of 201.90M provides minimal -65.13x coverage of tax expenses of (3.10M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Real Estate Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CBRE Cbre Group, Inc. 51.14 Bn 41.65 1.30 9.48 Bn
2 CSGP Costar Group, Inc. 26.47 Bn 1,304.00 8.66 1.18 Bn
3 BEKE KE Holdings Inc. 21.08 Bn 43.29 1.45 2.96 Bn
4 JLL Jones Lang Lasalle Inc 16.90 Bn 26.75 0.67 3.48 Bn
5 FSV FirstService Corp 7.01 Bn 56.92 1.78 1.51 Bn
6 COMP Compass, Inc. 6.69 Bn -118.64 1.01 0.48 Bn
7 CIGI Colliers International Group Inc. 5.39 Bn 69.70 2.00 2.50 Bn
8 OPEN Opendoor Technologies Inc. 4.15 Bn -13.09 0.88 1.79 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 4.54 1.34
EV to Cash from Ops. EV/CFO 34.97 2.97
EV to Debt EV to Debt 14.68 6.15
EV to EBIT EV/EBIT -139.54 5.23
EV to EBITDA EV/EBITDA 162.68 18.71
EV to Free Cash Flow [EV/FCF] EV/FCF 37.60 -9.39
EV to Market Cap EV to Market Cap 1.06 4.27
EV to Revenue EV/Rev 1.06 3.62
Price to Book Value [P/B] P/B 8.65 2.10
Price to Earnings [P/E] P/E -118.64 45.45
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.38
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -6.05
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.42
Interest Coverage Int. cover (Qtr) -5.69 -2.22
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.70 -12,525.88
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -19.37 23.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.27
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 74.94 4.69
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 138.41 26.73
EBIT Growth (1y) % EBIT 1y % (Qtr) 73.65 12.80
EBT Growth (1y) % EBT 1y % (Qtr) 69.98 21.27
EPS Growth (1y) % EPS 1y % (Qtr) 72.50 22.42
FCF Growth (1y) % FCF 1y % (Qtr) 392.91 54.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 26.61 39.11
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 4.28 1.45
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.01
Cash Ratio Cash Ratio (Qtr) 0.44 1.45
Current Ratio Curr Ratio (Qtr) 0.80 2.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.62 -0.06
Interest Cover Ratio Int Coverage (Qtr) -5.69 -2.22
Times Interest Earned Times Interest Earned (Qtr) -5.69 -2.22
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.80 -121.98
EBIT Margin % EBIT Margin % (Qtr) -0.76 -136.76
EBT Margin % EBT Margin % (Qtr) -0.90 -144.54
Gross Margin % Gross Margin % (Qtr) 18.20 32.87
Net Profit Margin % Net Margin % (Qtr) -0.80 -139.89