Deep Research

Compass (COMP)

3 min read

Snapshot

  • Ticker: COMP (NYSE)
  • Bucket: Consumer, Fintech & Housing
  • Q1 2026 position: $40.7M — 5,561,998 common shares, 0.81% of 13F
  • HQ: New York, New York
  • What it does: Largest US residential real-estate brokerage by sales volume; now combining with Anywhere Real Estate (Coldwell Banker, Century 21, Sotheby’s International Realty) to add franchising, title/escrow, and relocation.

Business Overview

Compass built the #1 US brokerage by recruiting top agents onto a proprietary technology platform and rolling up regional brokerages. In September 2025 it signed an all-stock merger with Anywhere Real Estate valued at ~10B including assumed debt), with Compass holders owning ~78% of the combined company. The deal diversifies Compass beyond commission revenue into Anywhere’s franchise royalties, title and escrow, and relocation businesses — over $1B of higher-margin revenue.

Standalone 2025 was a record year despite a still-frozen housing market: full-year revenue of 1.70B (+23.1% YoY, 11.3% organic), record full-year adjusted EBITDA, and 2.70B (+99% YoY; pro forma +7% to 61M, and 2.70–2.75B and expects positive free cash flow for the full year.

Financial Trajectory

PeriodRevenueNotes
FY2024~$5.6BExisting-home sales near multi-decade lows
FY2025$7.0BRecord year; record adj. EBITDA, $217M op. cash flow
Q1 2026$2.70B+99% YoY (Anywhere consolidated); pro forma +7%

Why Atreides Owns It

Compass is the transaction-volume leg of Atreides’ housing-recovery basket (with Rocket on financing and Ferguson on building products). The leverage is mechanical: existing-home transactions have been running ~30%+ below normalized levels since 2022; if mortgage rates decline and turnover mean-reverts, brokerage commissions scale with volume against a cost base management has held flat for years. The Anywhere merger adds counter-cyclical franchise/title cash flows and synergy optionality (deal underwritten at ~10x Anywhere’s 2026 EBITDA, 6.5x fully synergized).

The position is new as of Q4 2025 — initiated at $92M shortly after the Anywhere deal was announced — and was trimmed by ~36% of shares into Q1 2026. As with Rocket, the housing thesis is inferred from portfolio construction; Baker’s public 2025-26 commentary has focused on AI/semis rather than housing specifically.

Position History

QuarterTypeShares/NotionalValue% of 13F
Q4 2024—not held——
Q1 2025—not held——
Q2 2025—not held——
Q3 2025—not held——
Q4 2025Common8,723,434$92,206,6971.13%
Q1 2026Common5,561,998$40,658,2050.81%

A new Q4 2025 position of 8.7M shares (92M to $41M reflects both the ~36% share reduction and a meaningful decline in the stock price over the quarter — Atreides took some exposure off but kept a substantial residual position in the recovery thesis.

Risks

  • Housing turnover stays depressed: the “lock-in effect” persists as long as existing mortgages sit far below market rates.
  • Merger integration: combining the largest brokerage with Anywhere’s franchise network is a multi-year execution job (deal announced September 2025 with close initially expected H2 2026, but Anywhere’s revenue was already consolidated in Q1 2026 results, indicating an earlier close).
  • Commission compression: post-NAR-settlement changes to buyer-agent compensation structures could shrink the industry fee pool.
  • Anywhere brings substantial debt into the combined capital structure.
  • Agent economics: Compass’s model historically burned cash on recruiting incentives; a price war for top agents could resume.

Sources

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