Shares of Compass (COMP 1.67%), the nation's largest real estate brokerage, were climbing this week after the company delivered better-than-expected results in its fourth-quarter earnings report and gained market share in a challenging real estate environment.
While the company is still losing money on a generally accepted accounting principles (GAAP) basis, it did report a profit on adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), and its market-share gains bode well for the future.
According to data from S&P Global Market Intelligence, the stock was up 15% for the week as of Friday at 2:14 p.m. ET.
Image source: Compass.
Compass shines
Revenue soared 25.9% in Q4 to $1.38 billion, matching the consensus, while transaction value rose 24.1%, which was 3.5 times faster than the overall market.
Compass's market share improved 65 basis points to 5.06%, its highest year-over-year increases in three years.
Adjusted EBITDA rose from a loss of $23.7 million to a profit of $16.7 million. On a GAAP basis, its loss per share narrowed from $0.17 to $0.08.
CEO Robert Reffkin said,
I believe 2025 will be the year that the gap between Compass and the industry widens. By leveraging our structural advantages and our affiliation with the Christie's International Real Estate brand, we are positioning ourselves to accelerate our market share gains.
NYSE: COMP
Key Data Points
What's next for Compass
Looking ahead, Compass sees Q1 revenue of $1.35 billion to $1.475 billion in line with the consensus at $1.42 billon and up 34% from a year ago.
Based on its current growth rate, the company is in a great position to benefit from the eventual recovery in the housing market. If Compass can reach GAAP profitability, it could have a lot of upside.
