Compass Shares Jump With NYC Recovery Boosting Revenue Growth
(Bloomberg) -- Compass Inc., the real estate brokerage that made its trading debut in April, surged after the company said a hot housing market would boost revenue in the second quarter.
Compass is expecting to generate as much as $1.6 billion in revenue, it said in a statement yesterday. The company is benefiting from surging home sales as low interest rates and inventory shortages fuel bidding wars.
It brought in $1.1 billion in revenue during the first quarter, beating an average analyst estimate of $955 million. Its adjusted loss was also smaller than expected.
The shares jumped as much as 12% before paring gains. The stock was up 4.6% at $15.11 as of 9:48 a.m. in New York. Through Wednesday, it had dipped almost 20% since the trading debut.
While home prices are rising across the U.S., Compass is poised to benefit from improving real estate conditions in New York, the city where it was founded in 2012.
“We are seeing a nascent recovery in New York City already and New York is one of our oldest markets,” Compass Chief Financial Officer Kristen Ankerbrandt said in an earnings call yesterday. “A nice lift in New York should be good for margins over the foreseeable future.”
©2021 Bloomberg L.P.