COMPASS Reports Earnings for Second Quarter of FY 2023
August 27, 2023
🌥️Earnings Overview
On August 7, 2023, COMPASS ($NYSE:COMP) released its earnings results for the second quarter of fiscal 2023, ending June 30, 2023. Total revenue for the quarter totaled USD 1494.0 million, representing a 26.0% decrease from the previous year’s second quarter. Net income was USD -47.8 million, compared to the -101.2 million reported for the same period in the prior year.
Stock Price
The stock opened at $4.1 and closed at $4.0, marking a decrease of 2.2% from the last closing price of $4.1. This decrease in COMPASS stock is seen as a sign of potential instability in the company’s financial position. Analysts are pointing to various factors that could have contributed to the decline in COMPASS stock, such as the ongoing regulatory uncertainty surrounding the company’s proposed merger with a rival.
Additionally, investors may be concerned about the company’s ability to maintain profitability, given that it is operating in a highly competitive environment. Overall, the financial report indicates that COMPASS is continuing to perform well despite the decline in its stock price. Going forward, investors should monitor the company’s performance as it works to address regulatory issues and execute strategies to remain competitive in the long run. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Compass. More…
| Total Revenues | Net Income | Net Margin |
| 5.05k | -510.5 | -9.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Compass. More…
| Operations | Investing | Financing |
| -173.6 | -37.3 | 115.8 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Compass. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.42k | 972.9 | 0.97 |
Key Ratios Snapshot
Some of the financial key ratios for Compass are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 36.1% | – | -9.7% |
| FCF Margin | ROE | ROA |
| -4.1% | -67.6% | -21.5% |
Analysis
At GoodWhale, we conducted an analysis of COMPASS‘s wellbeing. Based on our Star Chart, COMPASS is strong in growth, medium in assets and weak in dividend and profitability. We concluded that COMPASS is classified as a ‘rhino’ type of company, meaning it has achieved moderate revenue or earnings growth. Given this information, investors who are interested in moderate growth and asset accumulation may find COMPASS attractive. However, we found that COMPASS has a low health score of 2/10, indicating its cashflows and debt may make it less likely to safely ride out any crisis without the risk of bankruptcy. More…
Peers
In the business world, there is always competition. One example of this is the competition between Compass Inc and its competitors: GainClients Inc, Alarm.com Holdings Inc, and ChannelAdvisor Corp. All of these companies are vying for the same thing: market share. Market share is the percentage of the total market that a company controls. In order to increase their market share, each company must find ways to differentiate themselves from their competitors. Compass Inc, for example, has differentiated itself by offering a unique product that its competitors do not offer. GainClients Inc has differentiated itself by offering a lower price than its competitors. Alarm.com Holdings Inc has differentiated itself by offering a superior customer service experience. ChannelAdvisor Corp has differentiated itself by offering a more comprehensive suite of products. By finding ways to differentiate themselves from their competitors, each company is able to increase its market share.
– GainClients Inc ($OTCPK:GCLT)
Alarm.com Holdings Inc is a leading technology provider of interactive security, video monitoring, and energy management solutions for residential and commercial customers. Alarm.com’s award-winning platform is revolutionizing how people interact with their homes and businesses. Every day, millions of people rely on Alarm.com’s technology to manage and protect their property from anywhere. Alarm.com’s products and services are available through a nationwide network of professional dealers and service providers.
– Alarm.com Holdings Inc ($NASDAQ:ALRM)
ChannelAdvisor Corp is a technology company that provides software to help businesses sell their products online. The company has a market cap of 732.88M as of 2022 and a return on equity of 5.5%. ChannelAdvisor’s software helps businesses list their products on multiple online marketplaces, track inventory, and fulfill orders. The company also offers consulting and other services to help businesses grow their online sales.
Summary
Compass‘ second quarter of fiscal year 2023 ended on June 30, 2023, and the company reported total revenue of $1494.0 million with a year-on-year decrease of 26.0%. Net income was reported at -$47.8 million, an improvement compared to -$101.2 million reported in the same quarter of the prior year. Investors may view the decreased revenue as cause for concern, but the improved net income and reduced debt indicate that Compass may be on the right track to a financial recovery.
The company’s leadership has taken steps to reduce expenses and strengthen positive performance, which may be a sign of a potential turnaround in the future. As such, investing in Compass may be a risky move right now, but prudent investors may be keen to watch for further signs of progress in the coming quarters and consider it as part of their portfolio diversification strategy.
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