(Bloomberg) -- Compass Inc. has surged 89% over two days as the hard-hit home seller committed to managing costs, building on investors’ optimism that the Federal Reserve could slow the pace of rate hikes.
Most Read from Bloomberg
‘It’s All Gone’: FTX Bankruptcy Has Retail Traders Bracing for Losses
Bankrupt FTX Hit by Mysterious Outflow of About $662 Million
Bankman-Fried’s Assets Plummet From $16 Billion to Zero in Days
Elizabeth Holmes Asks for a Lenient 18-Month Sentence at Home
Musk Warns Twitter Bankruptcy Possible as Senior Executives Exit
Shares of the New York-based residential real estate firm gained 44% Friday, after the chief executive officer said Compass is managing the business to reduce the cost base toward the goal of becoming free cash flow-positive in 2023. That gain topped a record rally notched Thursday after US inflation data bolstered the idea that a less-aggressive Fed would ease pressure on mortgages.
“This cost-cutting story is the best way to derive equity value in our digital real estate coverage,” Needham analyst Bernie McTernan, who holds a buy rating on the stock, wrote in a Friday note. “The most significant takeaway from the earnings call is how serious the company is on their ability to reduce expenses.”
Compass had been slammed this year alongside peers as the housing market was roiled by the steep rise in borrowing costs from the central bank’s campaign to curb inflation.
The brokerage’s stock is paring a sell-off that had reached 80% this year before the latest bounce, amid deteriorating conditions in the housing market. Hard-hit residential real estate technology peers from Redfin Corp. to Opendoor Technologies Inc. are joining in the multi-day bounce, gaining 60% and 38% over the two sessions, respectively.
--With assistance from Patrick Clark and Brandon Harden.
(Updates throughout to market close.)
Most Read from Bloomberg Businessweek
Americans Have $5 Trillion in Cash, Thanks to Federal Stimulus
One of Gaming’s Most Hated Execs Is Jumping Into the Metaverse
A Narrow GOP Majority Is Kevin McCarthy’s Dream/Nightmare Come True
The Golden Era of AI Chess Makes Things Tricky for Players
Meta Investors Are in No Mood for Zuckerberg’s Metaverse Moonshot
©2022 Bloomberg L.P.
