Compass (NYSE:COMP) Trading Down 6.5% - Time to Sell?

Key Points

• Compass shares fell 6.5% to about $9.95 in heavy trading, leaving the stock below its 50-day moving average but above its 200-day average.
• Despite the decline, analysts maintain a generally positive outlook: Compass has a “Moderate Buy” consensus rating and an average price target of $14.15, well above the recent trading price.
• The company exceeded quarterly expectations, reporting $0.11 in EPS versus $0.08 expected and revenue of $4.31 billion versus $4.11 billion forecast; however, its high P/E ratio and low net margin highlight valuation and profitability risks.

Compass, Inc. (NYSE:COMP - Get Free Report) shares were down 6.5% on Tuesday . The company traded as low as $10.06 and last traded at $9.9530. Approximately 4,844,528 shares traded hands during mid-day trading, a decline of 69% from the average session volume of 15,845,070 shares. The stock had previously closed at $10.65.

Wall Street Analysts Forecast Growth

Several research firms have recently issued reports on COMP. Zelman & Associates reissued a "hold" rating and set a $13.50 target price on shares of Compass in a research note on Thursday, August 6th. UBS Group upped their price target on Compass from $12.00 to $17.00 and gave the stock a "buy" rating in a report on Friday, July 31st. Zacks Research downgraded Compass from a "strong-buy" rating to a "hold" rating in a research report on Thursday, August 6th. Wells Fargo & Company raised their price objective on Compass from $12.00 to $13.00 and gave the company an "equal weight" rating in a report on Wednesday, August 5th. Finally, Deutsche Bank Aktiengesellschaft restated a "buy" rating and issued a $15.00 price objective on shares of Compass in a research report on Wednesday, August 5th. One equities research analyst has rated the stock with a Strong Buy rating, eight have issued a Buy rating and six have assigned a Hold rating to the stock. According to data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average target price of $14.15.

Compass Price Performance

The company has a 50-day moving average of $11.66 and a 200 day moving average of $9.68. The company has a quick ratio of 1.06, a current ratio of 1.06 and a debt-to-equity ratio of 1.05. The stock has a market capitalization of $7.73 billion, a PE ratio of 171.03 and a beta of 2.32.

Compass (NYSE:COMP - Get Free Report) last announced its earnings results on Tuesday, August 4th. The company reported $0.11 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.08 by $0.03. The company had revenue of $4.31 billion for the quarter, compared to analysts' expectations of $4.11 billion. Compass had a net margin of 0.63% and a return on equity of 3.62%. Sell-side analysts predict that Compass, Inc. will post 0.24 EPS for the current year.

Insider Transactions at Compass

In other Compass news, CEO Robert Reffkin sold 23,456 shares of the stock in a transaction dated Monday, August 3rd. The shares were sold at an average price of $11.70, for a total value of $274,435.20. Following the completion of the sale, the chief executive officer owned 7,757,748 shares in the company, valued at approximately $90,765,651.60. This represents a 0.30% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Corporate insiders own 2.85% of the company's stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the stock. IFP Advisors Inc purchased a new position in Compass during the second quarter worth approximately $31,000. Nykredit A S purchased a new stake in Compass in the 2nd quarter valued at $77,000. Allworth Financial LP acquired a new stake in shares of Compass in the 2nd quarter worth $110,000. Angeles Wealth Management LLC acquired a new stake in shares of Compass in the 2nd quarter worth $224,000. Finally, Wedmont Private Capital purchased a new position in shares of Compass during the 2nd quarter worth $242,000. 67.05% of the stock is currently owned by institutional investors and hedge funds.

Compass Company Profile

Compass, Inc is a technology-enabled residential real estate brokerage company that operates in the United States. The company provides brokerage services through a network of real estate agents who help clients buy, sell, and market residential properties.

Compass supports its agents with a suite of digital tools, including customer relationship management, property search, marketing, lead generation, transaction management, and workflow software. Its platform is designed to streamline the real estate process while helping agents manage client relationships and promote property listings.

Founded in 2012 as Urban Compass, the company later adopted the Compass name and expanded its operations across major U.S.

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