Goldman Sachs has reinstated coverage on Compass Inc. with a Neutral rating and a price target of $14.00, which equates to roughly 5% upside from the share price at the time of the announcement. The stock was trading at $13.58, close to its 52-week high of $13.96, and is said to be roughly in line with InvestingPro's fair value assessment.
The coverage return comes after Compass completed its merger with Anywhere Real Estate on January 9, 2026. That deal expanded Compass's operations both across the United States and internationally, altering the company's geographic footprint and its mix of revenue sources.
Post-merger, Compass's business composition now includes a larger share of non-commission revenue streams that tend to carry higher margins and lower volatility. These additions include franchise royalties as well as title and escrow services, which diversify the firm's income away from purely agent commissions.
Despite those changes, company-level profitability metrics remain challenged. InvestingPro data cited gross profit margins of 12.19%, a figure that highlights ongoing margin pressure even as the business diversifies. Analysts nonetheless expect Compass to reach profitability in the current year after recording losses over the prior twelve-month period.
Market and industry conditions also factor into the outlook. Goldman Sachs referenced a Mortgage Bankers Association forecast that projects existing home sales to grow 8% year-over-year in 2026, supported by mortgage rates that are lower than the levels seen in 2023-2024. The firm expects elevated transaction volumes to benefit Compass, particularly if agents make effective use of the company's proprietary productivity-enhancing technology platform.
Operational momentum is evident in recent topline and market performance. Compass reported 24.27% revenue growth over the last twelve months, and the company carries a market capitalization of approximately $7.65 billion. Its equity has also delivered a substantial return to holders, with a 93.45% price appreciation over the past year.
Regulatory and transaction milestones accompanied the merger. The acquisition of Anywhere Real Estate was completed after the Justice Department review period expired without objection, allowing the consolidation of two of the largest U.S. residential brokerages to move forward.
Other brokerages and research firms have also updated their views following the transaction. Needham increased its price target for Compass to $17 from $11, citing strategic and financial upside from the early closing of the HOUS acquisition and naming Compass its top pick, replacing Instacart on its Conviction List. JPMorgan initiated coverage with an Overweight rating and a $15 price target, pointing to the company's M&A activity and margin improvement prospects. UBS reiterated a Buy rating with a $12 price target, noting that the expiration of the Hart-Scott-Rodino waiting period removed a material regulatory hurdle related to the HOUS transaction.
Taken together, the analyst actions and company developments reflect a phase of strategic consolidation for Compass as it integrates Anywhere Real Estate and rebalances toward a mix of revenue streams that management and analysts view as more resilient. At the same time, the firm faces the task of converting top-line momentum into stronger margins and sustained profitability.
Summary
Goldman Sachs reinstated coverage on Compass with a Neutral rating and a $14 price target following the company’s January 9, 2026 merger with Anywhere Real Estate. The merger broadened Compass’s geographic reach and increased exposure to higher-margin non-commission revenues, even as gross profit margins remain low and the company transitions from recent losses toward expected profitability.