Boston Real Estate: Is Compass Real Estate Profitable?
Stock option programs sound good on paper, but as we can see with Compass, the reality varies. The post-IPO performance of Compass’ stock highlights the primary issue with stock as a recruiting tool.
I just read an interesting real estate article about Compass Real Estate: Here are some excerpts:
Compass is not profitable. Given its massive expenditures — both to support its brokerage acquisitions and to support its growing employee base — there’s simply no way it can be making money. Nor should it be (yet).
Compass is a growth stage business, investing today for a more powerful and profitable tomorrow. The question for all growth-stage businesses is whether they can ever achieve profitability. A number of other real estate industry behemoths are also unprofitable on a GAAP basis: Zillow, Redfin, Opendoor, eXp Realty, and Purplebricks.
Compass, like all private companies, does not need to share its financials.
The company is deploying an aggressive acquisition strategy to acquire agents and brokers to build market share, is positioning itself as a tech company, and sports a sky-high valuation based on its growth rate and future plans — but what are its future plans? How does it plan to turn the existing, unprofitable brokerage business into a mammoth of the real estate industry?
Boston Real Estate and the Bottom Line
Only time will tell. the verdict is still out