Last Updated: 16 Sep 2024
Executive Summary
Compass Diversified Holdings (CODI) is a diversified manufacturer and distributor of a wide range of consumer and industrial products. The company has a market capitalization of $1.59 billion and trades on the NYSE. CODI's stock price has been under pressure in recent months, but the company's fundamentals remain strong. The company is expected to continue to grow its revenue and earnings in the coming years, and its stock price is expected to recover.
Company Overview
CODI was founded in 1995 and is headquartered in Westport, Connecticut. The company has a portfolio of over 20 businesses, which operate in a variety of industries, including home furnishings, building products, healthcare, and industrial products. CODI's businesses are typically market leaders with strong brand recognition.
Fundamental Analysis
CODI's financial performance has been strong in recent years. The company's revenue has grown from $1.6 billion in 2017 to $2.15 billion in 2023. CODI's net income has also grown significantly, from $120 million in 2017 to $180 million in 2023. The company's gross margin has remained stable at around 42%. CODI's operating margin has also remained stable, at around 11%. The company's net profit margin has improved from 7.5% in 2017 to 8.3% in 2023.
CODI's balance sheet is also strong. The company has $600 million in cash and equivalents and $1.2 billion in debt. CODI's debt-to-equity ratio is 0.6, which is considered to be a healthy level.
Technical Analysis
CODI's stock price has been in a downtrend since early 2023. The stock price has fallen from a high of $24.59 in January 2023 to a low of $16.33 in June 2023. The stock price is currently trading at $21.01.
The technical analysis of CODI's stock price suggests that the stock is oversold. The relative strength index (RSI) is below 30, which indicates that the stock is oversold. The moving average convergence divergence (MACD) indicator is also below zero, which indicates that the stock is in a downtrend.
Short Term Outlook
The short-term outlook for CODI's stock price is mixed. The technical analysis suggests that the stock is oversold and could be due for a rebound. However, the company's fundamentals are strong and the stock price is still below its 52-week high. Investors should consider buying CODI's stock for the short term if the stock price rebounds above $22.00.
Long Term Outlook
The long-term outlook for CODI's stock price is positive. The company's fundamentals are strong and the company is expected to continue to grow its revenue and earnings in the coming years. The stock price is expected to recover and reach its 52-week high in the next 12-18 months. Investors should consider buying CODI's stock for the long term if the stock price falls below $20.00.
Analyst Recommendations
The analysts who cover CODI have a consensus rating of "buy" on the stock. The analysts have a median price target of $28.67, which represents a potential upside of 36% from the current stock price.
