Download PDF

1. Company Snapshot

1.a. 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.

Show Full description

1.b. Last Insights on COMP

Compass, Inc.'s recent performance was driven by record-breaking quarterly results, highlighted by a 90.3% year-over-year growth in GAAP net income to $39.4 million and a 96 basis point increase in market share to 6.09%. The company's revenue, transactions, and transaction value grew over 20%, outpacing the broader real estate industry's -0.9% contraction. Technological advancements, strategic M&A, and higher attach rates on post-sale services are fueling growth. Additionally, a record 832 principal agents joined Compass in Q2, and operating cash flow reached a record $72.8 million.

1.c. Company Highlights

2. Compass Delivers Record Q3 Results with Strong Revenue Growth

Compass reported a robust Q3 2025, with revenue surging 23.6% year-over-year to $1.85 billion, a record for the company. The growth was driven by a 22% increase in total transactions and a 7% rise in organic transactions. Adjusted EBITDA was $93.6 million, an 80% improvement from the year-ago quarter, resulting in an adjusted EBITDA margin expansion. The company's EPS loss was narrower than expected, with an actual loss of $-0.01 compared to estimates of $-0.02.

Publication Date: Nov -20

📋 Highlights
  • Record Q3 Revenue Growth:: Achieved $1.85 billion revenue, up 23.6% YoY, with organic revenue growth of 11% excluding M&A.
  • Adjusted EBITDA Surge:: Generated $93.6 million adjusted EBITDA, a 80% YoY increase, driven by revenue growth and expense discipline.
  • Free Cash Flow Milestone:: Produced $73.6 million in free cash flow, a new Q3 record, while paying down $50 million in debt.
  • Principal Agent Growth:: Added 851 gross principal agents organically (record) with 97.3% quarterly retention rate.
  • AI Integration Strategy:: Launched mandatory AI training across departments to reduce OpEx, with Compass AI 2.0 in alpha for agent rollout by next quarter.

Operational Highlights

The company's operational performance was strong, with key highlights including a record 22 average weekly sessions per agent on the Compass platform, a 97.3% quarterly principal agent retention rate, and the addition of 851 gross principal agents organically, a new record. The Christie's International Real Estate business continued to grow, with 4 new affiliates joining the network in the quarter and 6 affiliates in the pipeline.

Margin Expansion and Cost Management

Compass achieved an improvement in commissions and other related expenses as a percentage of revenue, down 73 basis points to 81.44%, driven by the impact of the Christie's International Real Estate acquisition, which has more favorable margins. The company is also leveraging AI to drive cost containment, with a mandatory employee AI learning initiative across the organization. As Robert Reffkin mentioned, "By embedding AI across all our workflows, we believe we can deliver a lower cost to serve per transaction, limit the increase in our OpEx going forward, and deliver an even better experience for our real estate professionals."

Valuation and Outlook

With a P/S Ratio of 0.77, the stock appears reasonably valued relative to revenue. However, the EV/EBITDA ratio of 120.3 suggests that the market is pricing in significant future growth. For Q4 2025, Compass expects revenue in the range of $1.59 billion to $1.69 billion and adjusted EBITDA to be in the range of $35 million to $49 million. Analysts estimate revenue growth at 12.8% for next year, indicating a continued growth trajectory.

Free Cash Flow and Debt

The company generated $73.6 million in free cash flow in Q3, a new record level, and paid down the $50 million balance on the revolver, ending the quarter with no outstanding balance and $170 million of cash and cash equivalents. Compass plans to accelerate debt paydown after closing the Anywhere deal, with a focus on being fiscally responsible and reducing costs.

3. NewsRoom

Card image cap

Opendoor vs. Compass: Which Real Estate Tech Stock Has the Edge?

Nov -28

Source: zacks.com

Card image cap

Is Compass (COMP) Outperforming Other Computer and Technology Stocks This Year?

Nov -27

Source: zacks.com

Card image cap

Wall Street Brunch: AI Trade Comeback

Nov -24

Source: seekingalpha.com

Card image cap

Compass and Zillow Are Battling Over Private Listings. It Could Change the Way Homes Are Sold.

Nov -21

Source: barrons.com

Card image cap

Compass stock price eyes a 25% surge despite insider sales

Nov -17

Source: invezz.com

Card image cap

Jeep eyes U.S. comeback following yearslong sales troubles

Nov -17

Source: cnbc.com

Card image cap

Christie's International Real Estate Expands into Portland, Ore. Behind Top-Producing Local Agents

Nov -14

Source: globenewswire.com

Card image cap

Sikich and KASE Insurex Debut MGA Compass to Guide Managing General Agents in Launching and Scaling Insurance Business

Nov -12

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.00%)

6. Segments

End-to-end Platform

Expected Growth: 11%

Compass' end-to-end platform growth is driven by increasing adoption of digital real estate solutions, rising demand for streamlined transaction processes, and expansion into new markets. Additionally, the company's AI-powered technology and data analytics capabilities enhance the home buying and selling experience, attracting more agents and clients. Strategic partnerships and investments in innovation also contribute to the platform's rapid growth.

7. Detailed Products

Real Estate Brokerage Services

Compass provides a full-service real estate brokerage platform, offering a range of services including property listing, marketing, and transaction management.

Agent Tools and Technology

Compass offers a suite of cutting-edge tools and technology to support its network of real estate agents, including CRM, marketing, and transaction management software.

Title and Escrow Services

Compass provides title insurance and escrow services to facilitate smooth and secure real estate transactions.

Mortgage Services

Compass offers mortgage lending services, providing clients with access to a range of loan options and expert guidance throughout the mortgage process.

Home Services

Compass provides a range of home services, including home inspections, appraisals, and insurance, to support clients throughout the home buying and selling process.

8. Compass, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Compass, Inc. faces moderate threat from substitutes due to the availability of alternative real estate platforms and traditional brokerage services.

Bargaining Power Of Customers

Compass, Inc. has a large customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Compass, Inc. has a diverse supplier base, which reduces the bargaining power of individual suppliers, giving the company an upper hand in negotiations.

Threat Of New Entrants

The real estate technology industry is highly competitive, and new entrants can easily disrupt the market, posing a significant threat to Compass, Inc.'s market share.

Intensity Of Rivalry

The real estate technology industry is highly competitive, with many established players, leading to intense rivalry among companies, including Compass, Inc.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 55.46%
Debt Cost 3.95%
Equity Weight 44.54%
Equity Cost 18.32%
WACC 10.35%
Leverage 124.54%

11. Quality Control: Compass, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
WM Technology

A-Score: 4.5/10

Value: 7.5

Growth: 3.0

Quality: 7.0

Yield: 0.0

Momentum: 8.0

Volatility: 1.3

1-Year Total Return ->

View Full Report
Stock-Card
CS Disco

A-Score: 4.5/10

Value: 7.4

Growth: 4.9

Quality: 5.4

Yield: 0.0

Momentum: 5.5

Volatility: 3.7

1-Year Total Return ->

View Full Report
Stock-Card
Enfusion

A-Score: 4.5/10

Value: 0.7

Growth: 7.0

Quality: 5.7

Yield: 0.0

Momentum: 8.0

Volatility: 5.3

1-Year Total Return ->

View Full Report
Stock-Card
ShotSpotter

A-Score: 4.1/10

Value: 5.3

Growth: 5.8

Quality: 4.4

Yield: 0.0

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

View Full Report
Stock-Card
Compass

A-Score: 3.8/10

Value: 4.4

Growth: 5.7

Quality: 2.8

Yield: 0.0

Momentum: 7.5

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Jamf

A-Score: 3.3/10

Value: 4.2

Growth: 5.8

Quality: 4.8

Yield: 0.0

Momentum: 0.5

Volatility: 4.7

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.4$

Current Price

10.4$

Potential

-0.00%

Expected Cash-Flows