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Compass Diversified Holdings
(NYSE:CODI)
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Rating:48Neutral
Price Target:
$11.00
â–¼(-4.51% Downside)
Action:Reiterated
Date:10/02/26
CODI’s score is held back primarily by weak profitability and elevated leverage, even though cash flow has improved. The latest earnings call adds support via maintained guidance, debt paydown progress, and lower future management fees, but Industrial execution issues and Lugano-related uncertainty remain meaningful risks. Technically, momentum appears subdued, and valuation is hard to assess given negative earnings and no provided common dividend yield.
Positive Factors
Branded Consumer Growth
Strong growth across several branded consumer subsidiaries indicates broad-based demand and improving operating leverage rather than reliance on one product. Sustained EBITDA expansion and margin gains can strengthen CODI’s portfolio earnings base and support reinvestment over the next several quarters.
Negative Factors
Elevated Leverage
Despite recent debt reduction, leverage remains high relative to the equity base and above management’s 3.0x–3.5x target. This limits balance-sheet cushion if subsidiary performance weakens and may require additional divestitures or cash allocation toward debt rather than growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Branded Consumer Growth
Strong growth across several branded consumer subsidiaries indicates broad-based demand and improving operating leverage rather than reliance on one product. Sustained EBITDA expansion and margin gains can strengthen CODI’s portfolio earnings base and support reinvestment over the next several quarters.
Read all positive factors
Compass Diversified Holdings (CODI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$779.44M
Dividend Yield214.04%
Average Volume (3M)601.50K
Price to Earnings (P/E)―
Beta (1Y)1.62
Revenue Growth8.37%
EPS Growth51.01%
CountryUS
Employees4,083
SectorIndustrials
Sector Strength72
IndustryConglomerates
Share Statistics
EPS (TTM)-2.07
Shares Outstanding75,235,970
10 Day Avg. Volume628,715
30 Day Avg. Volume601,502
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)0.82
Price to Sales (P/S)0.19
P/FCF Ratio-7.06
Enterprise Value/Market Cap3.95
Enterprise Value/Revenue1.72
Enterprise Value/Gross Profit3.85
Enterprise Value/Ebitda14.67
Forecast
1Y Price Target
$16.67Price Target Upside44.68% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)0.04
Revenue Forecast (FY)$1.68B
Compass Diversified Holdings Business Overview & Revenue Model
Company Description
Compass Diversified functions as a private equity firm, specializing in late-stage and middle-market investments. The company employs various strategies, including leveraged buyouts, industry consolidation efforts, recapitalizations, and strategic...
How the Company Makes Money
CODI makes money primarily through the operating performance of its subsidiary companies. Revenue is generated at the subsidiary level from the sale of products and services to end customers (for example, sales of branded consumer goods and sales ...
Compass Diversified Holdings Earnings Call Summary
Earnings Call Date:Aug 10, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call disclosed meaningful operational progress and several material positives — double-digit subsidiary adjusted EBITDA growth, strong brand-level performance (BOA, The Honey Pot, PrimaLoft, 5.11), a major $280M+ Sterno's sale applied to debt, a management fee amendment expected to reduce fees by ~ $20M in 2027, improved cash generation and reduced leverage versus year-end. Offsetting these positives are concentrated near-term challenges in the Industrial portfolio — most notably Altor's roughly 50% EBITDA decline — elevated Lugano-related costs and litigation expenses, comparability impacts from disposals, and leverage that remains above management's 3.0x–3.5x target absent a divestiture. Overall, the positives appear to outweigh the negatives but the company faces significant remediation work and execution risk in the Industrial segment and ongoing uncertainty related to Lugano recoveries.Positive Updates
Double-digit Subsidiary EBITDA Growth and Improved Cash Flow
Subsidiary adjusted EBITDA was approximately $92 million, up 12.6% year-over-year (continuing subsidiaries basis). CODI generated ~ $30 million of operating cash in Q2 and more than $50 million of operating cash year-to-date versus an operating cash outflow of ~ $65 million in the first half of 2025. Management reiterated free cash flow expectations in the ~$50 million range for the year (absent material divestitures).
Negative Updates
Altor — Significant Earnings Decline and Operational Issues
Altor adjusted EBITDA declined roughly 50% in the quarter. Drivers included tariff-related disruption affecting white goods, softer vaccine demand in the cold chain business, higher input costs, increased competition and subpar commercial execution. Management expects remediation to take several quarters and has initiated focused commercial and cost actions.
Read all updates
Q2-2026 Updates
Positive
Negative
Double-digit Subsidiary EBITDA Growth and Improved Cash Flow
Subsidiary adjusted EBITDA was approximately $92 million, up 12.6% year-over-year (continuing subsidiaries basis). CODI generated ~ $30 million of operating cash in Q2 and more than $50 million of operating cash year-to-date versus an operating cash outflow of ~ $65 million in the first half of 2025. Management reiterated free cash flow expectations in the ~$50 million range for the year (absent material divestitures).
Read all positive updates
Company Guidance
CODI maintained its fiscal 2026 total subsidiary adjusted EBITDA outlook of $320 million to $365 million (which includes roughly $9 million of Sterno’s Food Service EBITDA pre-sale) and provided segment ranges of $235 million to $270 million for Branded Consumer and $85 million to $95 million for Industrial, while assuming capital expenditures of $30 million to $40 million and no material M&A/divestiture or trade shocks. In Q2 continuing subsidiaries generated roughly $92 million of subsidiary adjusted EBITDA (≈$94 million including Sterno), net sales of ≈$411 million (GAAP net sales $424 million), subsidiary EBITDA was up 12.6% y/y (Branded Consumer +24.2%, Industrial -12.8%), operating cash was ~$30 million in Q2 (>$50 million YTD), cash on hand $87 million, total debt ≈$1.6 billion (down ~$300 million YTD), covenant leverage 4.8x and senior secured net leverage 0.66x, and management reiterated corporate cash management fees paid to the manager of ~$25–$30 million for the full year; they also expect a near-term Lugano recovery of nearly $20 million (plus additional tax-related recoveries ~ $20 million over time).Compass Diversified Holdings Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
27
Negative
Cash Flow
62
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.79B | 1.87B | 1.79B | 1.69B | 1.76B | 1.72B |
| Gross Profit | 799.14M | 721.24M | 750.42M | 674.72M | 649.43M | 661.58M |
| EBITDA | 209.70M | 16.16M | -47.49M | -27.07M | 81.59M | 193.13M |
| Net Income | -96.36M | -229.32M | -208.86M | 108.65M | -59.22M | 114.55M |
Balance Sheet | ||||||
| Total Assets | 2.75B | 3.04B | 3.30B | 3.33B | 3.49B | 3.14B |
| Cash, Cash Equivalents and Short-Term Investments | 87.44M | 68.02M | 59.66M | 446.62M | 52.67M | 160.73M |
| Total Debt | 1.75B | 1.88B | 3.53B | 3.33B | 1.83B | 1.28B |
| Total Liabilities | 2.15B | 2.47B | 2.77B | 2.47B | 2.56B | 1.86B |
| Stockholders Equity | 472.56M | 442.02M | 678.62M | 929.66M | 877.58M | 1.11B |
Cash Flow | ||||||
| Free Cash Flow | 79.62M | -51.15M | -124.34M | 22.30M | -106.83M | 94.17M |
| Operating Cash Flow | 111.30M | -6.83M | -67.64M | 78.08M | -46.65M | 134.05M |
| Investing Cash Flow | 268.70M | -48.03M | -422.45M | 570.50M | -628.24M | -317.50M |
| Financing Cash Flow | -53.01M | 60.50M | 100.61M | -260.16M | 575.24M | 273.21M |
Compass Diversified Holdings Technical Analysis
Negative
11.52
Price Trends
11.19
Negative
10.81
Negative
9.62
Positive
Market Momentum
-0.24
Positive
38.60
Neutral
31.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CODI, the sentiment is Negative. The current price of 11.52 is above the 20-day moving average (MA) of 10.76, above the 50-day MA of 11.19, and above the 200-day MA of 9.62, indicating a neutral trend. The MACD of -0.24 indicates Positive momentum. The RSI at 38.60 is Neutral, neither overbought nor oversold. The STOCH value of 31.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CODI.
Compass Diversified Holdings Risk Analysis
Compass Diversified Holdings disclosed 52 risk factors in its most recent earnings report. Compass Diversified Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Compass Diversified Holdings Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.18B | 9.76 | 11.56% | 0.61% | 4.83% | -20.20% | |
71 Outperform | $3.65B | 5.70 | 12.09% | 0.24% | 8.17% | 361.79% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
57 Neutral | $90.29B | 25.89 | 94.02% | 1.76% | 1.70% | 7.26% | |
48 Neutral | $779.44M | -4.97 | -21.01% | 214.04% | 8.37% | 51.01% | |
45 Neutral | $606.16M | -20.58 | -5.81% | 5.33% | -31.82% | 55.14% |
* Industrials Sector Average
CODI
Compass Diversified Holdings
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2.64
34.55%
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Compass Diversified Holdings Corporate Events
Dividends
Compass Diversified Declares Q3 Preferred Share Distributions
Positive
Oct 1, 2026
On October 1, 2026, Compass Diversified announced that its board declared third-quarter 2026 cash distributions on all three preferred share series, signaling continued support for income-focused investors. Holders of the 7.250% Series A Preferred...
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Compass Diversified amends credit facility, extends loan maturities
Positive
Aug 10, 2026
On August 6, 2026, Compass Group Diversified Holdings LLC amended its senior credit facility, extending the maturity of term loans and reduced revolving commitments to January 12, 2028 while tightening leverage covenants and eliminating an increme...
Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance
Compass Diversified Overhauls Management Agreement to Cut Fees
Positive
Jul 13, 2026
On July 12–13, 2026, Compass Diversified and its external manager, Compass Group Management, finalized a Ninth Amended and Restated Management Services Agreement that materially lowers base management fees and overhauls incentive compensatio...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.