Compass Diversified Intrinsic Value – COMPASS DIVERSIFIED Reports Second Quarter FY2023 Earnings Results on June 30, 2023
August 22, 2023
🌥️Earnings Overview
On August 2 2023, COMPASS DIVERSIFIED ($NYSE:CODI) reported its financial results for the second quarter of fiscal year 2023, ending June 30. The company’s total revenue for the period was USD 524.2 million, a slight 1.7% increase from the same quarter last year. Nevertheless, net income was USD 13.6 million, dropping by 48.4% compared to the year prior.
Market Price
On Wednesday June 30, 2023, COMPASS DIVERSIFIED reported their second quarter fiscal year 2023 earnings results. The stock opened at $22.2 and closed at $22.1, a decrease of 1.2% from the prior closing price of $22.4. This slight decline in stock price was due to the company’s below-expectation performance this quarter. A majority of the company’s revenue came from their core subsidiaries which include; Compass Group, Sterno Products, Liberty Safe, Clean Earth, and EmployBridge. Although these subsidiaries had a strong quarter, they failed to meet the revenue expectations analysts had set for them. Moving forward, COMPASS DIVERSIFIED plans to focus on cost optimization and product innovation to drive increased revenue growth in the future quarters.
They have also focused on strengthening their balance sheet by reducing their debt and increasing their cash position. This puts them in a favorable financial position heading into the remainder of fiscal year 2023. Overall, COMPASS DIVERSIFIED had a mixed second quarter performance. Although they were unable to meet expectations set by analysts, they remain in a strong financial position which will allow them to pursue their future growth strategies. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Compass Diversified. More…
| Total Revenues | Net Income | Net Margin |
| 2.3k | 129.3 | 1.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Compass Diversified. More…
| Operations | Investing | Financing |
| 28.74 | -641.38 | 582.12 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Compass Diversified. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 3.8k | 2.38k | 16.36 |
Key Ratios Snapshot
Some of the financial key ratios for Compass Diversified are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 16.9% | 31.3% | 7.2% |
| FCF Margin | ROE | ROA |
| -0.5% | 8.7% | 2.7% |
Analysis – Compass Diversified Intrinsic Value
At GoodWhale, we have conducted extensive research into the fundamentals of COMPASS DIVERSIFIED and have calculated a fair value of their share to be around $25.2 using our proprietary Valuation Line. Currently, the stock is traded at $22.1, which is a fair price that is undervalued by 12.4%. This presents an excellent opportunity for savvy investors to buy the stock at a discounted price and enjoy long-term gains on their investments. We believe that the long-term potential of the company is strong and that now is the perfect time to invest in the stock. More…
Peers
Competition between Compass Diversified Holdings and its competitors, Alpine 4 Holdings Inc, Ironstone Group Inc, and Schouw & Co A/S, is fierce. All four of these companies are striving to gain market share in their respective industries and have invested significant resources into developing and marketing their products and services. While each company has its own unique strengths and weaknesses, they all strive to provide the best customer service and highest quality products and services in order to gain an advantage over their competitors.
– Alpine 4 Holdings Inc ($NASDAQ:ALPP)
Alpine 4 Holdings Inc is an American company that provides technology and services to businesses. The company has a market cap of 111.73M as of 2023 and a Return on Equity of -8.99%. Market cap is the total market value of a company’s outstanding shares and is calculated by multiplying the current share price by the number of outstanding shares. A negative ROE indicates that the company is not generating enough income from its assets to cover its expenses, resulting in a net loss for shareholders.
– Ironstone Group Inc ($OTCPK:IRNS)
Ironstone Group Inc is a diversified holding company with a focus on the Resources, Technology, and Services sectors. As of 2023, the company has a market cap of 12.23M, reflecting its value in the market. Furthermore, its Return on Equity (ROE) stands at -10.76%, indicating that the company is not generating returns as efficiently as other companies of similar size. Ironstone Group Inc has interests in many different industries and is looking to expand its portfolio of investments.
– Schouw & Co A/S ($LTS:0O0N)
Schouw & Co A/S is a Denmark-based industrial group that provides a wide range of services, from the production and distribution of energy to the manufacture of industrial and consumer goods. As of 2023, the company has a market cap of 12.01B and a Return on Equity (ROE) of 8.91%, exhibiting strong financial performance and indicating a strong investor confidence in the company. The market cap of Schouw & Co A/S suggests that it is one of the leading industrial companies in the world, while the ROE further demonstrates its impressive financial standing.
Summary
Investors should note that COMPASS DIVERSIFIED‘s results for the second quarter of FY2023 ended August 2 2023 showed total revenue of USD 524.2 million, a slight increase of 1.7% compared to the same period last year. However, net income was USD 13.6 million, which was a decrease of 48.4% year over year. This suggests that there may be some underlying issues that need to be addressed in order to improve profitability. It is important for investors to closely monitor the company’s performance and evaluate potential risks before making any investment decisions.
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