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Investing.com - BTIG raised its price target on Compass Inc. (NYSE:COMP) to $11.00 from $9.00 on Wednesday, while maintaining a Buy rating on the real estate brokerage firm. The stock has shown remarkable momentum, delivering a 69% return over the past year and currently trading near $9.36, according to InvestingPro data.
The price target increase follows a gap up in residential real estate stocks after Federal Reserve Chair Powell’s speech last week, which sparked market expectations for a September interest rate cut.
BTIG cited Compass’s increased market share and reduced costs over recent years as factors that position the company to benefit significantly from a potential housing recovery if mortgage rates decline.
The research firm estimates Compass could achieve "recovered" EBITDA potential of $700-900 million based on current transaction share, compared to its 2025 estimate of $243 million, assuming 100-200 quarterly organic agent additions and low-single-digit growth in operating expenses.
BTIG’s analysis suggests Compass’s current stock price reflects a five-year housing recovery timeline, which the firm considers reasonable, with 2029 projected as the fully-recovered year when existing home sales could reach approximately 5.5 million.
In other recent news, Compass Inc. reported its Q2 2025 earnings, revealing a revenue increase to $2.06 billion, marking a 21.1% rise compared to the previous year. The company also saw its adjusted EBITDA grow to $126 million. However, Compass missed its earnings per share (EPS) forecast, posting $0.07 against the expected $0.08, which resulted in a 12.5% negative surprise. Despite the revenue growth, the earnings miss was a notable development for investors. The reaction to this news was a 1.9% decline in the stock during regular trading hours, although there was a slight aftermarket uptick. These recent developments highlight the mixed results for Compass, with strong revenue growth overshadowed by the earnings miss. Investors may find it useful to consider the implications of these earnings as they assess the company’s financial health.
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