Compass (NYSE:COMP) stock spiked during the pre-market session on Thursday after Insider reported that Vista Equity Partners is taking this leading residential real estate brokerage firm private. However, a Compass spokesperson told The Real Deal that the company had not received any offer for the private-equity takeover.
Investors’ reaction was positive, whether there was a deal or no deal. Notably, COMP stock is up about 11.8% in the pre-market session on Thursday.
It’s worth highlighting that the residential real estate market is facing headwinds from the increase in mortgage rates. This has taken a toll on Compass’ financials and stock price.
COMP reported an adjusted EBITDA of $4 million in Q2, down from $71 million reported in the prior-year period, reflecting the market slowdown. Given the challenges, Compass stock is down about 72% year-to-date.
Is COMP a Good Stock to Buy?
While COMP has announced cost reduction measures to cushion its bottom line amid challenges, the rising interest rates and weak macro environment could continue to pose challenges.
COMP stock has a Moderate Buy consensus rating on TipRanks based on three Buy and two Hold recommendations. Further, these analysts’ average price target of $5.54 implies 117.3% upside potential.
Investors should note that hedge funds have been selling COMP stock. Per TipRanks’ data, hedge funds sold 10.2M COMP stock last quarter.
COMP stock has an Underperform Smart Score of two out of 10 on TipRanks.