Compass Diversified (NYSE:CODI) Issues Quarterly Earnings Results

Compass Diversified (NYSE:CODI) released its quarterly earnings results on Monday. The financial services provider reported ($0.09) earnings per share for the quarter, reports. The business had revenue of $424.04 million for the quarter. Compass Diversified had a negative net margin of 5.38% and a negative return on equity of 9.53%.

Here are the key takeaways from Compass Diversified’s conference call:

• Broad-based operating growth: Continuing subsidiaries generated approximately $92 million in second-quarter adjusted EBITDA, up 12.6% year over year, led by branded consumer businesses and Arnold Magnetic Technologies. BOA, The Honey Pot Co., PrimaLoft, 5.11, and Arnold all delivered double-digit EBITDA growth.
• Deleveraging and liquidity improved materially. CODI applied more than $280 million from the Sterno food-service sale to debt reduction, ending the quarter with approximately $1.6 billion of debt, an 87 million cash balance, and covenant leverage of 4.8 times versus 5.3 times in the first quarter.
• The amended management services agreement is expected to reduce 2027 fees by approximately $20 million versus the prior formula, while tying a greater portion of compensation to shareholder returns and operating performance. Management also indicated that additional asset sales remain a key potential catalyst for closing the valuation discount.
• Altor remained a significant weakness, with adjusted EBITDA down roughly 50% as tariffs, weaker vaccine demand, higher input costs, competition, and poor commercial execution pressured results. Management expects only gradual improvement over the next four to five quarters.
• CODI maintained its full-year 2026 subsidiary adjusted EBITDA outlook of $320 million to $365 million, raising the branded consumer range to $235 million–$270 million but lowering industrial guidance to $85 million–$95 million. Management expects approximately $50 million of free cash flow after payments, excluding the potential impact of future divestitures.

Compass Diversified Price Performance

Shares of CODI traded down $0.12 during mid-day trading on Wednesday, hitting $12.20. 543,194 shares of the company traded hands, compared to its average volume of 1,104,281. The company has a current ratio of 2.67, a quick ratio of 1.56 and a debt-to-equity ratio of 34.60. The business has a 50-day moving average of $10.38 and a 200 day moving average of $9.32. Compass Diversified has a one year low of $4.58 and a one year high of $13.24. The stock has a market capitalization of $917.88 million, a price-to-earnings ratio of -5.62 and a beta of 1.27.

Institutional Investors Weigh In On Compass Diversified

Several large investors have recently bought and sold shares of the company. SG Capital Management LLC acquired a new position in shares of Compass Diversified during the 4th quarter worth about $7,626,000. Healthcare of Ontario Pension Plan Trust Fund acquired a new stake in shares of Compass Diversified in the fourth quarter valued at about $4,099,000. Jacobs Levy Equity Management Inc. raised its holdings in Compass Diversified by 75.2% during the fourth quarter. Jacobs Levy Equity Management Inc. now owns 1,966,408 shares of the financial services provider’s stock worth $9,439,000 after acquiring an additional 843,965 shares in the last quarter. Marshall Wace LLP raised its holdings in Compass Diversified by 2,043.1% during the fourth quarter. Marshall Wace LLP now owns 780,482 shares of the financial services provider’s stock worth $3,746,000 after acquiring an additional 744,063 shares in the last quarter. Finally, Qube Research & Technologies Ltd boosted its position in Compass Diversified by 738.4% during the second quarter. Qube Research & Technologies Ltd now owns 784,746 shares of the financial services provider’s stock valued at $4,928,000 after purchasing an additional 691,144 shares during the last quarter. Institutional investors own 72.73% of the company’s stock.

Analysts Set New Price Targets

Several research firms recently commented on CODI. UBS Group set a $18.00 target price on shares of Compass Diversified in a research note on Tuesday. Weiss Ratings reiterated a “sell (d-)” rating on shares of Compass Diversified in a research report on Friday, July 17th. TD Cowen boosted their price target on shares of Compass Diversified from $12.50 to $18.00 and gave the company a “buy” rating in a research report on Tuesday. Finally, B. Riley Financial raised shares of Compass Diversified from a “neutral” rating to a “buy” rating and upped their price objective for the stock from $11.00 to $15.00 in a research note on Tuesday. Three analysts have rated the stock with a Buy rating, two have given a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat.com, the company currently has an average rating of “Hold” and a consensus price target of $16.50.

About Compass Diversified

Compass Diversified Holdings (NYSE:CODI) is a publicly traded private equity company headquartered in Bethesda, Maryland. The firm specializes in acquiring and managing middle-market businesses across a variety of industries, with a focus on driving operational performance and sustainable growth. As an externally managed entity, Compass Diversified leverages a disciplined investment approach to build a portfolio of market-leading companies that benefit from strategic oversight, capital support and shared best practices.

Compass Diversified’s investment activities span five core sectors: branded consumer, consumer services, differentiated industrial products, value-added distribution and business services.