Compass, Inc. (NYSE:COMP) is projected to report an increase in earnings alongside higher revenues for the quarter ending September 2026. This expectation aligns with the consensus outlook, which provides insight into the company’s financial performance. The actual results compared to these estimates will likely influence the company’s stock price in the short term.
The upcoming earnings report, scheduled for release on November 5, could lead to a stock price increase if the results exceed expectations. Conversely, a failure to meet these expectations might result in a decline in stock value. The sustainability of any immediate price changes and future earnings forecasts will largely depend on the management’s discussion of business conditions during the earnings call. Evaluating the likelihood of an earnings per share (EPS) surprise is, therefore, crucial.
Zacks Consensus Estimate
Compass is anticipated to report quarterly earnings of $0.07 per share, marking an 800% increase from the previous year. Revenue projections stand at $3.91 billion, reflecting a 111.9% rise compared to the same quarter last year1.
Estimate Revisions Trend
Over the last 30 days, the consensus EPS estimate for the quarter has been revised downward by 177.6% to its current level. This revision indicates a shift in analysts’ collective reassessment of their initial estimates during this period. It’s important for investors to consider that individual analysts’ revisions may not always be reflected in the overall change.
Earnings Whisper
Revisions to estimates ahead of a company’s earnings release can provide clues about the business conditions for the period in question. This concept is central to the Zacks Earnings ESP (Expected Surprise Prediction) model. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter. The Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. Analysts revising their estimates just before an earnings release often have the latest information, which could be more accurate than earlier predictions.
A positive or negative Earnings ESP reading theoretically indicates the potential deviation of actual earnings from the consensus estimate. However, the model’s predictive power is most significant for positive ESP readings. A positive Earnings ESP, when combined with a Zacks Rank of #1 (Strong Buy), #2 (Buy), or #3 (Hold), is a strong predictor of an earnings beat. Research shows that stocks with this combination tend to deliver a positive surprise nearly 70% of the time, with a solid Zacks Rank enhancing the predictive power of Earnings ESP2.
It’s important to note that a negative Earnings ESP reading does not necessarily predict an earnings miss. Research indicates that predicting an earnings beat with confidence is challenging for stocks with negative Earnings ESP readings and/or a Zacks Rank of #4 (Sell) or #5 (Strong Sell).
Current Outlook for Compass
For Compass, the Most Accurate Estimate surpasses the Zacks Consensus Estimate, suggesting that analysts have recently become optimistic about the company’s earnings prospects. This results in an Earnings ESP of +33.40%. However, the stock currently holds a Zacks Rank of #4, making it difficult to conclusively predict an earnings beat based on this combination.
Historical Earnings Surprise
Analysts often consider a company’s historical performance in matching consensus estimates when calculating future earnings projections. Examining Compass’s surprise history can provide insight into its potential impact on upcoming results. In the last reported quarter, Compass met expectations by posting earnings of $0.11 per share, with no surprise. Over the past four quarters, the company has exceeded consensus EPS estimates twice3.
While an earnings beat or miss is not the sole determinant of stock movement, many stocks lose ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts can help stocks gain despite an earnings miss. Therefore, betting on stocks expected to beat earnings expectations can increase the odds of success. It’s advisable to check a company’s Earnings ESP and Zacks Rank before its quarterly release.
Compass may not appear to be a compelling candidate for an earnings beat. However, investors should consider other factors when deciding whether to invest in this stock ahead of its earnings release.
Expected Results for Paycom Software
Another player in the Zacks Internet – Software industry, Paycom Software (NYSE:PAYC), is expected to report earnings of $2.76 per share for the quarter ending September 2026. This estimate represents a 42.3% increase from the previous year. Revenues are projected to reach $535.08 million, an 8.5% rise from the same quarter last year. The consensus EPS estimate for Paycom has remained unchanged over the past 30 days, but a higher Most Accurate Estimate has resulted in an Earnings ESP of +2.02%. Despite this, the company’s Zacks Rank of #4 (Sell) makes it difficult to predict an earnings beat conclusively. Over the last four quarters, Paycom has surpassed consensus EPS estimates three times4.
For those interested in tracking upcoming earnings announcements, the Zacks Earnings Calendar is a useful tool.
Footnotes:
- Compass is expected to report a significant increase in earnings and revenue. Source.
- A positive Earnings ESP and a strong Zacks Rank are strong predictors of an earnings beat. Source.
- Compass has met or exceeded earnings expectations in two of the last four quarters. Source.
- Paycom’s earnings and revenue projections for the upcoming quarter. Source.
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