Compass raises Q4 and full-year 2024 outlook amid market headwinds

NEW YORK - Compass, Inc. (NYSE: COMP), a leading residential real estate brokerage with a market capitalization of $2.85 billion, has updated its financial outlook for the fourth quarter of 2024 and the full year, signaling stronger performance than previously anticipated. Despite what is expected to be a 29-year low in resale transactions, the company projects record Adjusted EBITDA and free cash flow for 2024. According to InvestingPro analysis, the stock is currently trading slightly below its Fair Value, with analysts expecting net income growth this year.

The updated guidance, released ahead of Compass's appearance at the Needham Growth Conference today, suggests Q4 revenue between $1.36 billion and $1.39 billion, up from the previously forecasted range of $1.225 billion to $1.325 billion. Full-year revenue is now estimated to reach between $5.61 billion and $5.64 billion, compared to the earlier projection of $5.47 billion to $5.57 billion. This aligns with InvestingPro data showing a strong revenue growth forecast of 13% for FY2024. For deeper insights into Compass's financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

Adjusted EBITDA for the fourth quarter is expected to be between $15 million and $18 million, a significant increase from the $0 to $10 million range initially projected. For the entire year of 2024, Adjusted EBITDA is forecasted to be between $124 million and $127 million, up from the former estimate of $109 million to $119 million.

Compass CEO Robert Reffkin attributed the strong performance to the company's ability to outperform the market and maintain operational expenditure (OPEX) discipline. The company also successfully recruited over 650 principal agents organically in the quarter, marking a 50% improvement from the same period last year.

CFO Kalani Reelitz highlighted the company's execution in the fourth quarter, which has led to positive free cash flow in every quarter of the year, including the typically challenging fourth quarter.

Compass also expects its full-year 2024 non-GAAP OPEX to be slightly below the low-end of its previously stated range of $876 million to $896 million, while reiterating its positive free cash flow outlook for the year.

The company has noted that the preliminary financial results have not yet been audited or reviewed by their independent accounting firm, and as such, the final results may differ.

This press release statement serves as the basis for the updated financial outlook provided by Compass, Inc. Investors are advised to monitor Compass's disclosure channels, including SEC filings and the investor relations page on their website, for material information.

In other recent news, Compass Inc. reported robust growth in its third-quarter earnings, with a significant year-over-year revenue increase and a rise in transactions. The company's adjusted EBITDA soared to $52 million, marking a 139% increase from the same quarter in the previous year. Oppenheimer has raised its price target on Compass Inc. shares to $9.50, up from the previous $8.50, maintaining its Outperform rating for the real estate technology company. This adjustment comes in the wake of Compass's strategic acquisition of Christie's International Real Estate, Midwest and Atlanta brokerages, as well as a Title company, in a deal valued at $444 million. Furthermore, Oppenheimer anticipates that Compass will achieve $30 million in cost synergies over time. Looking ahead, Compass Inc. is expected to benefit from product tailwinds in fiscal year 2025. These recent developments underscore the ongoing momentum and growth trajectory of Compass Inc. in the real estate technology sector.

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