Compass reported earnings of twelve cents a share on $4.3 billion in revenue in its second quarter, the real estate brokerage said in a Tuesday announcement.
The earnings blew past estimates that called for eight cents a share on roughly $4.1 billion in revenue, according to FactSet.
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Investors will be listening for more than just financial results when the brokerage Compass reports its second-quarter earnings on Tuesday after the market closes.
What the company has to say about its premarket listings strategy, its integration of brokerage Anywhere, and its technology platform for agents will be high on the list.
Analysts foresee Compass reporting earnings of eight cents a share on $4.1 billion in revenue, up from seven cents a share on $2.06 billion one year prior. It will be the second quarter for Compass as a combined company with Anywhere, which was among the nation's largest real estate brokerages when Compass purchased it earlier this year.
Anywhere is the franchiser of real estate brands such as Corcoran, Century 21, and Coldwell Banker. The deal was announced last year and closed in January, a faster timeline than expected.
Compass previously said it expected revenue in a range of $4 billion to $4.2 billion in the quarter and adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, in a range of $310 million to $350 million.
Investors tuning in for the brokerage's conference can expect to hear about its end-to-end technology for brokers. Compass last month said it would expand access to its platform, which allows agents to do tasks such as managing listings, communicating with clients and creating marketing materials on a single platform.
But perhaps the area of most focus will be Compass's home listings marketing strategy, which, on a case-by-case basis, can involve circulating listings only among Compass agents and those who contact them to view it for a period before making it available more broadly.
The marketing strategy "is creating a really deep data moat, in our view, " Deutche Bank analysts Kunal Madhukar and Benjamin Black wrote in a late July note. They rate the shares Buy with a $13 price target. Compass closed up 3.2% to $11.75 on Monday, according to Dow Jones Market Data. The stock is up 11% this year.
The strategy isn't without controversy. Compass has said its approach gives sellers more flexibility and allows them to test pricing without accruing days on the market or price cut history. Critics say such an approach contributes to a less transparent housing market, potentially disadvantaging buyers who benefit from seeing all the options available to them.
"If, in any given market, Compass is able to sell a significant share of the listings while they are still exclusive to its brokers, then it has the potential to not only garner a much larger share of the consumer traffic and transactions, but also improve its ability to recruit additional brokers," the analysts wrote.
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