It's been a good week for Compass, Inc. (NYSE:COMP) shareholders, because the company has just released its latest second-quarter results, and the shares gained 9.8% to US$12.58. Results overall were not great, with earnings of US$0.11 per share falling drastically short of analyst expectations. Meanwhile revenues hit US$4.3b and were slightly better than forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Following the latest results, Compass' nine analysts are now forecasting revenues of US$14.4b in 2026. This would be a huge 36% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 29% to US$0.12. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$14.0b and earnings per share (EPS) of US$0.31 in 2026. So it's pretty clear the analysts have mixed opinions on Compass after the latest results; even though they upped their revenue numbers, it came at the cost of a pretty serious reduction to per-share earnings expectations.

Curiously, the consensus price target rose 10% to US$15.33. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Compass at US$18.00 per share, while the most bearish prices it at US$12.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Compass' rate of growth is expected to accelerate meaningfully, with the forecast 86% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 5.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.3% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Compass is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Compass. Long-term earnings power is much more important than next year's profits. We have forecasts for Compass going out to 2028, and you can see them free on our platform here.

Don't forget that there may still be risks.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.