Compass Diversified (CODI) stock analysis

In our weekly check, Compass Diversified is graded D (A to F). Of 23 checks on debt, profit, cash flow and trend: 7 pass, warnings: 7, red flags: 9.

About Compass Diversified

Compass Diversified is an Industrials company (Conglomerates) based in the United States, listed on NYSE as CODI.

What our checks show for CODI

Red flags

• Net debt is 7.9x a year of EBITDA (debt/equity 3.7). That limits room in a downturn and raises refinancing risk.
• Operating profit does not cover the interest bill (0.5x): interest is paid from cash or new debt.
• The net margin fell by 12 points over 5 years, to -5.4%: the company keeps less of each sale as profit.
• Weak EPS growth
• The company is losing money: the net margin is -5.4%.
• Compass Diversified pays a dividend while losing money: it is funded from reserves or debt.
• The price swings a lot: 66.2% annual volatility. Expect large ups and downs.
• The stock has fallen as much as 86% from a peak. Would you have held through that?
• Return on capital (ROCE) is only 3.4%.

Warning signs

• Analysts expect earnings per share to shrink about 24.6% a year.
• Analysts expect only about 0.2% a year of growth in revenue.
• Revenue grew only 0.7% a year over the last 3 years.
• Free cash flow is only 4.4% of revenue.
• A small company (market value $783 million): usually riskier and followed by fewer analysts.
• The stock is still below its previous peak.
• Beta 1.3: the stock usually moves more than the market, both up and down.

Strengths

• The gross margin is 44.6% and has risen by 6.2 points: pricing power is holding.
• Operating cash flow is 1.16x net profit: the profit arrives as real cash.
• Analysts expect the net margin to improve by 9.6 points from today's -5.4%.

Next earnings report: 2026-11-04

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Questions

What grade does Compass Diversified (CODI) have?

In our weekly check, Compass Diversified is graded D (A to F). Of 23 checks on debt, profit, cash flow and trend: 7 pass, warnings: 7, red flags: 9. The grade is a risk check, not a buy or sell recommendation.

What are the main risks of CODI stock?

This week's biggest flags for Compass Diversified: High debt, Weak interest cover, Margins falling. In total 16 of 23 checks show a warning or a red flag.

What does Compass Diversified do?

Compass Diversified is an Industrials company (Conglomerates) based in the United States, listed on NYSE as CODI.

When does Compass Diversified report earnings next?

The next earnings report is expected on 2026-11-04. We re-run the checks every week, so the grade can change after it.

The grade is a risk check, not a price forecast, and not investment advice. In our 10-year test (S&P 500, 2016-2026), stocks we graded A or B fell more than 30% 2-3 times less often than D or F, without a lower average return.

Updated 2026-10-24

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