CODI Should I Buy
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Compass Diversified Holdings (CODI) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown some improvement in financial performance, the stock lacks strong positive catalysts, and the technical indicators, options data, and analyst sentiment suggest a neutral to slightly bearish outlook. It would be prudent to wait for further clarity after the upcoming earnings report and a more favorable entry point.
The MACD is positive and expanding, indicating a mild bullish momentum. However, the RSI is neutral at 69.605, and the moving averages are converging, suggesting a lack of strong directional trend. The stock is trading near its resistance level (R1: 7.17), which could limit further upside in the near term.
Additionally, the MACD indicates mild bullish momentum, and options data shows bullish sentiment.
The stock has a 60% chance of declining in the short term based on candlestick pattern analysis. The upcoming earnings report could introduce volatility, and the stock is trading near resistance levels, limiting immediate upside.
In Q3 2025, revenue increased by 3.51% YoY to $472.56M, and gross margin improved by 3.06% YoY to 39.03%. However, the company still reported a net loss of $88.88M, albeit with significant YoY improvement (+94.63%). EPS also improved by 96.67% YoY but remains negative at -1.18.
CJS Securities recently upgraded CODI to Outperform with a $15 price target, reflecting optimism about long-term recovery. However, B. Riley lowered its price target to $13, citing near-term challenges related to balance sheet management and portfolio reconstruction.
