On Thursday, Needham analysts maintained a Buy rating and a $10.00 price target for Compass Inc. (NYSE:COMP) stocks, following the company’s performance update.
The real estate technology firm surpassed its revenue and adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) guidance midpoint by 8% and 230%, respectively.
The analysts said "the preannouncement from COMP, beating the midpoint of their revenue and adj. EBITDA guide by +8% and +230%, we believe driven by better than expected agent additions, better market conditions and continued opex discipline with opex coming slightly below the guidance range for ’24E."
The analysts at Needham believe that the positive trends observed in the fourth quarter of 2024 are likely to continue into 2025.
They anticipate that real estate agents will increasingly gravitate towards tech-enabled brokerages, either organically or through mergers and acquisitions. This shift is expected to support Compass’s growth and contribute to the achievement of its "3030 vision," which aims for significant expansion within the industry.
The potential elimination of the Clear Cooperation policy, which Compass expects to occur relatively soon, could provide an additional boost to the company’s growth strategy.
The Clear Cooperation policy requires listing brokers to submit a listing to the Multiple Listing Service (MLS) within one business day of marketing a property to the public. Its removal could alter the competitive landscape for real estate brokerages.
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