What Happened?
Shares of real estate technology company Compass (NYSE:COMP) jumped 24.2% in the afternoon session after the company reported strong Q4 2024 results, with revenue and EBITDA exceeding Wall Street's expectations. Transactions surged, outpacing the growth observed in the real estate market. In addition, Compass provided optimistic revenue and EBITDA guidance for the next quarter, both of which beat analysts' expectations, indicating momentum is improving. Zooming out, we think this was a good quarter with some key areas of upside.
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What The Market Is Telling Us
Compass’s shares are extremely volatile and have had 34 moves greater than 5% over the last year. But moves this big are rare even for Compass and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 18.6% on the news that the company reported first quarter results that beat analysts' revenue and adjusted EBITDA expectations. Notably, the company recorded a 7.1% growth in transactions despite a 3.5% decline for the entire residential real estate market in the first quarter, as reported by the National Association of Realtors. Guidance was also encouraging as next quarter's revenue guidance came in higher than Wall Street's estimates. Overall, this was a solid quarter for Compass.
Compass is up 71% since the beginning of the year, and at $9.92 per share, has set a new 52-week high. Investors who bought $1,000 worth of Compass’s shares at the IPO in March 2021 would now be looking at an investment worth $492.31.
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