Compass, Inc. (NYSE:COMP) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Compass, Inc. provides real estate brokerage services in the United States. The US$1.7b market-cap company announced a latest loss of US$321m on 31 December 2023 for its most recent financial year result. The most pressing concern for investors is Compass' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Compass is bordering on breakeven, according to the 7 American Real Estate analysts. They expect the company to post a final loss in 2025, before turning a profit of US$107m in 2026. Therefore, the company is expected to breakeven roughly 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 83% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Underlying developments driving Compass' growth isn't the focus of this broad overview, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we'd like to point out is that The company has managed its capital judiciously, with debt making up 5.7% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of Compass to cover in one brief article, but the key fundamentals for the company can all be found in one place – Compass' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

1. Valuation: What is Compass worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Compass is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Compass's board and the CEO's background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.