Why Compass Stock Turned South After Hours

Compass Inc COMP shares are trading lower in Monday's after-hours session after the company reported worse-than-expected financial results and issued guidance below analyst estimates.

Compass said second-quarter revenue increased 4% year-over-year to $2 billion, which missed average analyst estimates of $2.12 billion, according to Benzinga Pro. The company reported a quarterly net loss of (24) cents per share, which missed average analyst estimates for a loss of (14) cents per share.

Compass attributed the higher net loss to higher expenses related to strategic business initiatives, stock compensation, and restructuring costs. 

"Given the challenges the real estate market has faced so far this year and the likelihood that this difficult environment will continue for the foreseeable future, we are announcing a significant cost reduction program," said Robert Reffkin, CEO of Compass. 

All targeted cost reductions are expected to be completed by the end of 2022. The reductions are expected to enable the company to be free cash flow positive in 2023.

Compass said it expects third-quarter revenue to be between $1.4 billion and $1.5 billion versus the estimate of $2.11 billion. The company expects full-year revenue to be between $6.15 billion and $6.45 billion versus the estimate of $7.59 billion. 

See Also: IZEA Worldwide Q2 Results Top Estimates, Registers 96% Revenue Growth

COMP Price Action: Compass has a 52-week high of $9.71 and a 52-week low of $3.31.

The stock was down 16.2% in after-hours at $3.91 at the time of publication.

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