BTIG assumes coverage on Compass stock with Buy rating, $9 target

Investing.com - BTIG has assumed coverage on Compass Inc. (NYSE:COMP) with a Buy rating and a price target of $9.00, according to a research note released Monday. The real estate technology company, currently trading at $6.41 with a market capitalization of $3.32 billion, has seen its stock surge 78% over the past year.

The firm highlighted Compass’s evolution from a growth-at-all-costs startup to a free-cash-flow-positive industry leader with increasing EBITDA profits and GAAP net income potential, regardless of existing home sales (EHS) market conditions.

BTIG noted that aggressive cost cuts, financial discipline, and agent growth position Compass to deliver significant recovery leverage, with the potential for approximately $650 million in EBITDA when the existing home sales market eventually rebounds.

While visibility into the timing of market recovery remains very low, BTIG’s reverse-DCF analysis suggests the current stock price is discounting a five-year recovery timeline for existing home sales.

The firm indicated this recovery timeline assumption is not particularly challenging, supporting its bullish stance on the real estate technology company’s shares.

In other recent news, Compass Inc. reported its first-quarter 2025 earnings, revealing a mixed financial performance. The company experienced a slight miss in earnings per share (EPS) forecasts, with a reported loss of $0.09 against a forecasted loss of $0.06. However, Compass exceeded revenue expectations, achieving $1.4 billion compared to the anticipated $1.34 billion. This represents a 28.7% increase in revenue year-over-year. UBS analysts maintained a Buy rating on Compass, highlighting the company’s strategic focus on enhancing inventory depth and integrating technology with its network of over 20,000 principal agents. Analysts also expressed confidence in Compass’s inorganic growth strategy, particularly following the appointment of Lacey Conway as Executive Vice President of Mergers and Acquisitions. In other developments, SmartRent Inc. announced the appointment of Frank Martell as President and CEO. Martell, who has over 30 years of executive leadership experience, is expected to focus on expanding SmartRent’s market presence and delivering value through its hardware-enabled SaaS model for rental property technology.

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