Compass Inc (NYSE:COMP) shares are popping on Wednesday after an early dip sparked by dilution concerns amid the company’s announcement of a $750 million offering of convertible senior notes due 2031.
What To Know: Compass plans to sell the notes through a private placement, depending on market conditions. The company also expects to give initial buyers a 13‑day option to purchase up to an additional $112.5 million in notes.
The notes will be senior unsecured debt and will be guaranteed by the same Compass subsidiaries that back its existing revolving credit facility.
Compass says it plans to use the proceeds for general corporate purposes. That could include paying down certain debts tied to Anywhere Real Estate Inc (NYSE:HOUS) and its subsidiaries, if the companies complete their previously announced merger. Part of the funds will also go toward the cost of entering into capped call transactions.
For investors who choose to convert the notes, Compass can settle those conversions in cash, Class A shares or a mix of both.
Is COMP A Good Stock To Buy?
When deciding whether to buy a stock, there are some key fundamentals investors may want to consider. One of these factors is revenue growth. Buying a stock is essentially a bet that the business will continue to grow and generate profits in the future.
Compass has reported average annual revenue growth of 11.05% over the past 5 years. .
It’s also important to pay attention to valuation when deciding whether to buy a stock. Compass has a forward P/E ratio of 25.84. This means investors are paying $25.84 for each dollar of expected earnings in the future. The average forward of Compass’s peers is 25.26.
Other important metrics to look at include a company’s profitability, balance sheet, performance relative to a benchmark index. For in-depth analysis tools and important financial data, check out Benzinga Pro.
COMP Price Action: Compass shares were up 13.94% at $12.32 at the time of publication on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro.
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