When Will Compass, Inc. (NYSE:COMP) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at Compass, Inc.'s (NYSE:COMP) future prospects. Compass, Inc. provides real estate brokerage services in the United States. The US$3.1b market-cap company posted a loss in its most recent financial year of US$321m and a latest trailing-twelve-month loss of US$235m shrinking the gap between loss and breakeven. The most pressing concern for investors is Compass' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

See our latest analysis for Compass

Consensus from 7 of the American Real Estate analysts is that Compass is on the verge of breakeven. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$17k in 2025. The company is therefore projected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2025? Working backwards from analyst estimates, it turns out that they expect the company to grow 79% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Compass' upcoming projects, though, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that The company has managed its capital judiciously, with debt making up 6.8% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Compass which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Compass, take a look at Compass' company page on Simply Wall St. We've also compiled a list of important factors you should look at:

1. Valuation: What is Compass worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Compass is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Compass’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.