If you’ve been eyeing Compass stock lately and wondering whether it’s time to buy, sell, or simply watch from the sidelines, you’re in good company. Compass has served up a rollercoaster of price moves this year, with a standout 25.7% gain year to date and a surging 25.9% spike over the past twelve months. Even looking further back, the stock has rocketed an attention-grabbing 196.3% in three years. That said, the recent 30-day dip of -22.9% is enough to give anyone pause, sparking questions about whether investors see short-term risks or simply a healthy pullback after such a powerful run.
There has been plenty of buzz in the market, as investors reprice growth stocks and reevaluate risk in a shifting economic landscape. Compass has managed to hold on to a portion of its gains, suggesting some growth optimism and perhaps improved sentiment relative to peers, although the recent slide does hint that not everyone agrees on the outlook just yet.
So how do we know if Compass is really trading at a bargain right now? Taking a step back, the company notched 4 out of 6 checks as undervalued in our valuation scoring, giving it a value score of 4. This means Compass is flashing more “undervalued” signals than most, but is still facing some lingering questions. Let’s dig into the different ways investors figure out whether Compass represents smart value, and how you might get an even sharper read before making your move.
The Discounted Cash Flow (DCF) model projects a company’s expected future cash flows and discounts them back to today’s value, offering a snapshot of what the business may actually be worth in the present. For Compass, analysts considered the latest trailing twelve month Free Cash Flow, which stands at $139.45 million. Projections show robust growth, with annual Free Cash Flow estimated to rise to $378 million by 2027, and extrapolated out further to $676.89 million by 2035 based on Simply Wall St’s methodology.
These cash flow figures reflect expectations of consistent year-over-year growth, factoring in both analyst estimates and forecast modeling. Using this DCF approach, Compass currently has an intrinsic value of $15.26 per share, which is well above its current market price. This suggests the stock is trading at a 52.2% discount to its estimated fair value.
Simply put, by DCF math, Compass appears dramatically undervalued right now.
Story Continues
Result: UNDERVALUED
COMP Discounted Cash Flow as at Oct 2025
Our Discounted Cash Flow (DCF) analysis suggests Compass is undervalued by 52.2%. Track this in your watchlist or portfolio, or discover more undervalued stocks.
For a company like Compass, which is working toward consistent profitability, the Price-to-Sales (P/S) ratio is often the preferred valuation multiple. P/S is useful because it compares the company’s stock price to its actual sales, making it a valuable way to assess value even when earnings aren’t yet steady. Growth expectations and risk also play a big part in what investors consider a “normal” or “fair” multiple. Higher growth and lower risk usually command a higher P/S, while higher risk brings the average down.
As of now, Compass trades at a P/S ratio of 0.65x. For context, the average P/S across the Real Estate industry sits at 2.78x, while the average among Compass’s closest peers is 0.60x. These benchmarks help set the scene, but they don’t account for company-specific details like growth, profitability, or unique risks.
This is where Simply Wall St’s “Fair Ratio” comes in. The Fair Ratio blends in factors like Compass’s earnings growth, market cap, profit margins, risk profile, and industry setting. This proprietary multiple is more insightful than just comparing against averages. For Compass, the Fair Ratio is 0.66x, a very close match to its actual P/S. This narrow gap suggests the market price fairly reflects Compass’s fundamentals right now.
Result: ABOUT RIGHT
NYSE:COMP PS Ratio as at Oct 2025
PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.
Earlier we mentioned that there’s an even better way to understand valuation, so let’s introduce you to Narratives—a tool that lets you connect a company’s story with the underlying numbers, giving context to your fair value estimate based on your expectations for Compass’s future revenue, earnings, and margins.
Instead of just relying on a single “neutral” fair value, Narratives let you map out your own vision for Compass, detailing how growth drivers, risks, and market shifts could play out in reality. Narratives work by linking your perspective about Compass, from AI-powered productivity to demographic trends or regulatory risks, to a forecast, then showing the fair value that flows from your assumptions.
This approach is simple and accessible on Simply Wall St’s Community page, where millions of investors worldwide use Narratives to refine their strategies and see diverse viewpoints. You can instantly compare your calculated Fair Value to the current market price and decide whether to buy, sell, or wait. Best of all, Narratives update dynamically as new company data or news is published, keeping your analysis fresh.
For example, some users in the Community see Compass’s potential for AI-driven margin expansion, setting fair values near $11 per share, while others are more cautious about regulatory headwinds and estimate closer to $7. This illustrates how Narratives let you tailor your decision to your own outlook.
Do you think there’s more to the story for Compass? Create your own Narrative to let the Community know!
NYSE:COMP Community Fair Values as at Oct 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include COMP.
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