Research HubSoftware & Cloud ServicesCompass, Inc. (COMP)

Coverage:KVYO DDOG CRWD NOW SNOW PLTR ADBE CRM PANW NET SHOP MDB

SEC 10-K / 10-Q Equity ResearchSoftware & Cloud ServicesTicker: COMP

Compass, Inc. (COMP) DCF Valuation & Fundamental Primer

Compass, Inc. (COMP) currently trades at $10.85 with an enterprise value of $2.05B. Our proprietary institutional model rates Compass, Inc. at 58/100 (Grade: B · Mixed Fundamental Profile). The current market price prices in an implied 5-year revenue CAGR of -11.5% vs. historical growth of 10.9% (Substantial Margin of Safety).

GDA Quality Score

B58/100

Mixed Fundamental Profile

Share Price / DCF Base

$10.85 / $3.25

Enterprise Value

$6.21B

TTM Revenue

$5.63B (+10.9%)

Gross Margin

17.7%

Rule of 40 Score

12.8%

EV / TTM Revenue

1.1×

Structural Moat: Enterprise Software & Cloud Services Switching Costs & Recurring Workflow Integration

Key Growth Catalyst: AI workflow automation, multi-module expansion across enterprise cohorts, and operating margin leverage at Compass, Inc..

Institutional fundamental teardown of Compass, Inc. (COMP) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.

Seed COMP in Interactive 3-Statement Model

Section 1 · Intrinsic Valuation Engine

Compass, Inc. (COMP) 3-Scenario DCF Valuation Range

WACC: 10.0% · Terminal Growth: 2.5% · Diluted Shares: 547.0M

bear Case DCFSensitivity

$1.43

Implied Equity Value:$783.1M

vs Current ($10.85):-86.8%

base Case DCFPrimary Benchmark

$3.25

Implied Equity Value:$1.77B

vs Current ($10.85):-70.1%

bull Case DCFSensitivity

$5.47

Implied Equity Value:$2.99B

vs Current ($10.85):-49.6%

Interactive What-If DCF SandboxSim Rule of 40: 20.9%

Stress-test COMP's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.

Seed Custom Drivers in /model

1-Click Regimes:

5Y Revenue CAGR10.9%

2%Hist: 10.9%50%

Target FCF Margin10.0%

5%Base: 10%45%

WACC Discount Rate10.0%

6.5%Base: 10%14.5%

Terminal Growth (g)2.5%

1.0%Implies 13.7× Y5 FCF4.0%

Accounting Lens:

Simulated Implied Price$19.42

Spread vs Market+79.0%

Simulated EV$10.90B

Effective FCF Margin10.0%

Simulated 5-Year Cash Flow Trajectory (Unlevered FCF vs. Discounted PV)Cumulative 5Y PV: $2.88B

Year 1$6.24B

FCF:$624.3M

PV:$567.5M

Year 2$6.92B

FCF:$692.3M

PV:$572.2M

Year 3$7.68B

FCF:$767.8M

PV:$576.8M

Year 4$8.51B

FCF:$851.5M

PV:$581.6M

Year 5$9.44B

FCF:$944.3M

PV:$586.3M

Enterprise Value Composition Bridge$10.90B

Split between 5-Year Explicit Cash Flows and Discounted Terminal Value

5Y Explicit PV: $2.88B (26.5%)Terminal PV: $8.01B (73.5%)

(+) Balance Sheet Cash & Equivalents+$223.8M

(−) Total Debt Obligations−$497.6M

(=) Implied Equity Value (547.0M shs)$10.62B

2D Institutional Valuation Sensitivity Heatmap

Implied share price & upside/downside spread across 25 valuation states (Current Price: $10.85).

WACC \ Terminal	1.5%	2.0%	2.5%	3.0%	3.5%
8.5%	$21.65 +99%	$23.01 +112%	$24.61 +127%	$26.50 +144%	$28.76 +165%
9.3%	$19.41 +79%	$20.49 +89%	$21.73 +100%	$23.16 +113%	$24.85 +129%
10.0%	$17.57 +62%	$18.44 +70%	$19.42 +79%	$20.55 +89%	$21.84 +101%
10.8%	$16.04 +48%	$16.74 +54%	$17.54 +62%	$18.44 +70%	$19.46 +79%
11.5%	$14.73 +36%	$15.32 +41%	$15.97 +47%	$16.70 +54%	$17.52 +62%

Section 2 · Fundamental Underwriting

Institutional Software Quality Scorecard (58/100 · Grade B)

Mixed Fundamental Profile

Viable recurring software business but carries notable dilution, lower margins, or higher leverage.

Cash Conversion13 / 25

Actual: 1.9% marginTarget: Target: ≥100%

Positive FCF but lower conversion efficiency due to capex or timing

Dilution Friction25 / 25

Actual: 2.3% of RevTarget: Target: ≤8%

Minimal dilution friction; management compensation aligned with shareholders

Unit Economics8 / 25

Actual: 18% GM / R40: 13%Target: Target: ≥75% GM / ≥40% R40

Sub-par gross margins; higher cost of delivery or hardware/services mix

Balance Sheet12 / 25

Actual: -$273.8M Net DebtTarget: Target: Net Cash > 0

Moderate leverage or cash burn; monitor liquidity runway

Core Investment Strengths & Moats

Low dilution friction: SBC is only 2.3% of revenue

Key Operational & Dilution Risks

Lower software gross margins (17.7%), indicating higher hosting or service delivery drag

Section 3 · Expectations Investing

Reverse-DCF Solver: What Growth is Priced Into COMP?

Substantial Margin of Safety

The current share price only requires -11.5% 5-year CAGR (-9.5% dilution-adjusted), well below historical growth of 10.9%. If the company maintains baseline execution, there is asymmetric upside.

Implied 5-Year Revenue CAGR

-11.5%

Required to justify $6.21B EV

Historical Run-Rate CAGR

10.9%

Audited multi-year top-line trajectory

Growth Hurdle Spread

-22.4%

Implied hurdle minus historical growth

Implied FCF Margin @ Hist. Growth

5.7%

Steady-state FCF margin needed at current CAGR

Institutional Dilution-Adjusted Hurdle Lens

Headline Reverse-DCF ignores Stock-Based Compensation (2.3% of revenue) and annual share dilution (0.3%/yr). Accounting for both requires -9.5% 5-year revenue CAGR to justify $10.85/sh on a true per-share economic cash flow basis.

True Economic Hurdle-9.5%

SBC & Dilution Hurdle Tax+2.0% / yr

Section 4 · 5-Year Forecast Schedule

Compass, Inc. (COMP) 5-Year Fundamental Forecast

Customize in Live Engine

Statement Line Item	TTM Audited Base	TTM	Y1	Y2	Y3	Y4	Y5
Revenue	$5.63B	$5.63B	$6.24B	$6.92B	$7.68B	$8.51B	$9.44B
Gross Profit	$994.5M	$994.7M	$1.10B	$1.22B	$1.36B	$1.50B	$1.67B
Operating Income (EBIT)	$-154.8M	$-154.8M	$-171.7M	$-190.4M	$-211.1M	$-234.2M	$-259.7M
Stock-Based Compensation (SBC)	$127.5M	$127.8M	$141.7M	$157.2M	$174.3M	$193.3M	$214.3M
Unlevered Free Cash Flow (FCF)	$105.8M	$105.8M	$117.4M	$130.2M	$144.3M	$160.1M	$177.5M
SBC-Adjusted True Cash Flow	$-21.7M	$-22.0M	$-24.3M	$-27.0M	$-29.9M	$-33.2M	$-36.8M

Section 5 · Relative Valuation Multiples & Regression

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Click any peer node or ticker to open its dedicated equity research report

Rule of 40 vs. EV / Revenue Multiple Regression

OLS Fit: EV/Rev = -6.1 + 0.36 × (Rule of 40) · R² = 67%

Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.

COMP Actual vs. Reg. Multiple1.1× vs 2.0× fair

Reg.-Implied Share Price$20.08 (45.0% Discount)

COMPCompass, Inc.·Rule of 40: 12.8%·Actual EV/Rev: 1.1×·Regression Fair Multiple: 2.0×

45.0% Below Trendline (Attractive)Open COMP Report

Company	Ticker	Market Cap	TTM Revenue	Gross Margin	FCF Margin	Rule of 40	SBC % Rev	EV / Rev
Compass, Inc.	COMP	$5.93B	$5.63B	17.7%	1.9%	12.8%	2.3%	1.1×
ServiceNow	NOW	$152.61B	$10.98B	79.2%	31.1%	54.2%	15.9%	13.9×
Workday, Inc.	WDAY	$50.35B	$8.00B	75.0%	27.4%	43.9%	19.0%	6.4×
Salesforce	CRM	$217.10B	$37.90B	77.2%	32.8%	42.8%	8.4%	5.8×
Datadog	DDOG	$46.05B	$2.68B	80.8%	31.1%	57.7%	21.3%	17.4×
Snowflake Inc.	SNOW	$71.79B	$3.63B	66.5%	25.2%	57.7%	40.8%	20.0×
Hubspot	HUBS	$19.89B	$2.63B	85.0%	21.3%	52.7%	19.2%	7.7×
Peer Cohort Median Benchmark (N=6)				78.2%	29.2%	53.5%	19.1%	10.8×

Section 6 · Downside Protection & Multiple Sensitivity

EV / Revenue Multiple Compression Stress Test

Multiple Scenario	EV / Revenue	Implied Enterprise Value	Implied Equity Value	Implied Share Price	Delta vs Current
Current Multiple	1.1×	$6.21B	$5.93B	$10.85	0.0%
-20% Multiple Compression	0.9×	$4.97B	$4.69B	$8.58	-20.0%
-35% Multiple Compression	0.7×	$4.04B	$3.76B	$6.88	-35.0%
Software Baseline Floor (5.0× EV/Rev)	5.0×	$28.15B	$27.87B	$50.96	+353.4%

Section 7 · Investor Diligence FAQ

Frequently Asked Questions: Compass, Inc. (COMP) Valuation

What is Compass, Inc. (COMP)'s intrinsic DCF valuation and implied share price?

Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Compass, Inc. (COMP) has a Base Case implied value of $3.25 per share (with a Bear Case of $1.43 and a Bull Case of $5.47), compared to its current price of $10.85. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.

What is Compass, Inc. (COMP)'s Rule of 40 score and Free Cash Flow margin?

Compass, Inc. achieves a Rule of 40 score of 12.8%, combining a 10.9% revenue growth run-rate with a 1.9% TTM free cash flow margin on $5.63B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.

What revenue growth rate is priced into COMP stock according to Reverse-DCF analysis?

At $10.85 per share (Enterprise Value of $6.21B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of -11.5%, compared to Compass, Inc.'s historical CAGR of 10.9%. Overall market expectations are rated as "Substantial Margin of Safety".

How does Compass, Inc. compare to Software & Cloud Services software peers?

Compass, Inc. (COMP) earns an institutional Software Quality Score of 58/100 (Grade B — Mixed Fundamental Profile). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.

How does Stock-Based Compensation (SBC) impact Compass, Inc. (COMP)'s valuation?

Compass, Inc. recorded $127.5M in TTM stock-based compensation (2.3% of revenue). When treating SBC as a cash-equivalent compensation expense, Compass, Inc.'s SBC-adjusted free cash flow yield is -0.4%, scoring 25/25 on our Shareholder Dilution Friction pillar.

Compass, Inc. (COMP) DCF Valuation & Fundamental Primer

WACC \ Terminal

1.5%

2.0%

2.5%

3.0%

3.5%

8.5%

$21.65

+99%

$23.01

+112%

$24.61

+127%

$26.50

+144%

$28.76

+165%

9.3%

$19.41

+79%

$20.49

+89%

$21.73

+100%

$23.16

+113%

$24.85

+129%

10.0%

$17.57

+62%

$18.44

+70%

$19.42

+79%

$20.55

+89%

$21.84

+101%

10.8%

$16.04

+48%

$16.74

+54%

$17.54

+62%

$18.44

+70%

$19.46

+79%

11.5%

$14.73

+36%

$15.32

+41%

$15.97

+47%

$16.70

+54%

$17.52

+62%

Statement Line Item

TTM Audited Base

TTM

Revenue

$5.63B

$6.24B

$6.92B

$7.68B

$8.51B

$9.44B

Gross Profit

$994.5M

$994.7M

$1.10B

$1.22B

$1.36B

$1.50B

$1.67B

Operating Income (EBIT)

$-154.8M

$-171.7M

$-190.4M

$-211.1M

$-234.2M

$-259.7M

Stock-Based Compensation (SBC)

$127.5M

$127.8M

$141.7M

$157.2M

$174.3M

$193.3M

$214.3M

Unlevered Free Cash Flow (FCF)

$105.8M

$117.4M

$130.2M

$144.3M

$160.1M

$177.5M

SBC-Adjusted True Cash Flow

$-21.7M

$-22.0M

$-24.3M

$-27.0M

$-29.9M

$-33.2M

$-36.8M

Company

Ticker

Market Cap

TTM Revenue

Gross Margin

FCF Margin

Rule of 40

SBC % Rev

EV / Rev

Compass, Inc.

COMP

$5.93B

$5.63B

17.7%

1.9%

12.8%

2.3%

1.1×

ServiceNow

NOW

$152.61B

$10.98B

79.2%

31.1%

54.2%

15.9%

13.9×

Workday, Inc.

WDAY

$50.35B

$8.00B

75.0%

27.4%

43.9%

19.0%

6.4×

Salesforce

CRM

$217.10B

$37.90B

77.2%

32.8%

42.8%

8.4%

5.8×

Datadog

DDOG

$46.05B

$2.68B

80.8%

31.1%

57.7%

21.3%

17.4×

Snowflake Inc.

SNOW

$71.79B

$3.63B

66.5%

25.2%

57.7%

40.8%

20.0×

Hubspot

HUBS

$19.89B

$2.63B

85.0%

21.3%

52.7%

19.2%

7.7×

Peer Cohort Median Benchmark (N=6)

78.2%

29.2%

53.5%

19.1%

10.8×

Multiple Scenario

EV / Revenue

Implied Enterprise Value

Implied Equity Value

Implied Share Price

Delta vs Current

Current Multiple

1.1×

$6.21B

$5.93B

$10.85

0.0%

-20% Multiple Compression

0.9×

$4.97B

$4.69B

$8.58

-20.0%

-35% Multiple Compression

0.7×

$4.04B

$3.76B

$6.88

-35.0%

Software Baseline Floor (5.0× EV/Rev)

5.0×

$28.15B

$27.87B

$50.96

+353.4%

Compass, Inc. (COMP) 3-Scenario DCF Valuation Range

2D Institutional Valuation Sensitivity Heatmap

Institutional Software Quality Scorecard (58/100 · Grade B)

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Reverse-DCF Solver: What Growth is Priced Into COMP?

Compass, Inc. (COMP) 5-Year Fundamental Forecast

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Rule of 40 vs. EV / Revenue Multiple Regression

EV / Revenue Multiple Compression Stress Test

Frequently Asked Questions: Compass, Inc. (COMP) Valuation

What is Compass, Inc. (COMP)'s intrinsic DCF valuation and implied share price?

What is Compass, Inc. (COMP)'s Rule of 40 score and Free Cash Flow margin?

What revenue growth rate is priced into COMP stock according to Reverse-DCF analysis?

How does Compass, Inc. compare to Software & Cloud Services software peers?

How does Stock-Based Compensation (SBC) impact Compass, Inc. (COMP)'s valuation?

Related Software & Cloud Services Equity Research Reports

Compass, Inc. (COMP) 3-Scenario DCF Valuation Range

2D Institutional Valuation Sensitivity Heatmap

Institutional Software Quality Scorecard (58/100 · Grade B)

Core Investment Strengths & Moats

Key Operational & Dilution Risks

Reverse-DCF Solver: What Growth is Priced Into COMP?

Compass, Inc. (COMP) 5-Year Fundamental Forecast

Software & Cloud Services Peer Comparables & Rule of 40 Regression

Rule of 40 vs. EV / Revenue Multiple Regression

EV / Revenue Multiple Compression Stress Test

Frequently Asked Questions: Compass, Inc. (COMP) Valuation

What is Compass, Inc. (COMP)'s intrinsic DCF valuation and implied share price?

What is Compass, Inc. (COMP)'s Rule of 40 score and Free Cash Flow margin?

What revenue growth rate is priced into COMP stock according to Reverse-DCF analysis?

How does Compass, Inc. compare to Software & Cloud Services software peers?

How does Stock-Based Compensation (SBC) impact Compass, Inc. (COMP)'s valuation?

Related Software & Cloud Services Equity Research Reports