I'm going all in on Compass (COMP) tomorrow after *hopefully* a small pullback, because I believe this motherfucker is going to 12 or 13 within a month or two.
**Compass Inc** \- **COMP**
Real Estate/Tech
**Market Cap**: 5.65b
**Average Vol:** 6.55m
**52w High/Low:** 10.25/2.89
**P/E:** \-32.69
**EPS:** \-0.31
Obviously these numbers seem pretty shitty on their own without context. My guess is that the market is valuing more like a tech-growth stock, and if we've learned anything from Carvana... sometimes the story and momentum are most important things.
Now, I know the real estate market is objectively terrible and probably isn't getting better in the near term, but this might be the exception in the short-term because it has been vastly outperforming the sector and the market. There is a lot to like here.
**Take a look at the highlights from today's earnings report.**
**Revenue:** $1.38 billion in Q4, a 25.9% increase year-over-year.
* **Adjusted EBITDA:** $16.7 million in Q4, including $4.2 million in M&A transaction costs.
* **Net Loss:** $40.5 million in Q4, improved from a $83.7 million loss a year ago.
* **Free Cash Flow:** $26.7 million in Q4, compared to negative $41 million last year.
* **Gross Transaction Value:** $54 billion in Q4, a 29.2% increase year-over-year.
* **Commissions and Related Expenses:** 82.53% of revenue in Q4, up 82 basis points from last year.
* **Principal Agent Count:** Grew by 21% year-over-year, with 3,069 net new agents in 2024.
* **Title and Escrow Attach Rate:** Improved by over 800 basis points year-over-year.
* **Market Share:** Increased from 4.41% to 5.06% in Q4, a 65 basis point gain year-over-year.
* **Q1 2025 Revenue Guidance:** $1.35 billion to $1.475 billion.
* **Q1 2025 Adjusted EBITDA Guidance:** $11 million to $25 million.
* **Full Year 2024 Revenue:** $5.6 billion, a 15% increase year-over-year.
* **Full Year 2024 Adjusted EBITDA:** $126 million, a record for Compass.
* **Cash and Cash Equivalents:** $234 million at the end of Q4.
Their financials are trending in the right direction, especially given the pressure the real estate market has been under lately.
So the regard in me came to the conclusion that they are essentially a combination of an Uber and Zillow: that specializing in selling house to the super rich.
*What I mean by that:*
* **The way they are using their technology is potentially disruptive like Uber.** They aren't just a marketplace like Zillow which makes money selling leads; they're a whole ass cloud-based real estate brokerage.
* **Their work force pays them** to use their platform which has a proprietary CRM system, automated marketing tools, analytics, and uses AI to help them determine the price, etc. Agents make commissions.
* **They also do a shit ton of acquisitions (24 so far).** This is strategic positioning to gain market share when mortgage rates finally come down.
* **Keep in mind** that a significant portion of their business and marketing image is tailored to ***the ultra rich****.* From what I could find, 35% of their 22,000 active listing are listed under Private Exclusive. They also recruit luxury real estate agents for this specific purpose.
**I also just got to looking at the dark pool data from today and my interpretation was this:**
**Dark Pool Data:**
**Net Vol. :** \-3,504,876
**Net Vol$ :** \-35,889,930
**Position :** \-13,369,776
**Position$:** \-110,410,00
Given the massive volume from today's trading sessions (6X@29.37m), huge net-short volume that aligns with the price action, and sharp decrease in the rolling 20-day short volume: this appears to be a genuine breakout instead of a temporary pump.
**25%** of the short float was liquidated or covered today with almost no pullbacks at 6 times the normal volume. This means buyers were driving the price action,
The way it melted up, adding $1.5B to its cap makes me think that the market is positioning for a move to $12-$13 dollars per share, with $10 is the new base.
Overall dark pool position is still negative, so that's always a short exposure risk, but I'm biting and going all in tomorrow.
**Bonus:**
***Options are stupid fucking cheap for it.***
**IV Rank:** 11.45
Anyway, that's it for my first DD. I was tempted to use AI to put my thoughts together, but honestly.... I fucking hate ChatDD.
Now, I've been sitting here typing for over an hour, I'm hungry, and this reminds me of writing papers for college so I'm going to end it here. Let me know if I'm just regarded or missed something. Obviously don't take my word for it: DYOR.