Analyst Note| Michael Field, CFA |
Organic revenue rose by 36% in third quarter for narrow-moat Compass, following declines of 27% and 34% in the second and first quarters respectively. Such is the nature of easy comparative periods, however, with the business finally lapping the first full quarter of COVID-19-impacted revenue. While revenue is tracking our full-year expectations, operating margins, which rose to 5% in quarter three, are running slightly ahead of our full-year estimate of 4%. Although we may tweak our near-term estimates, we do not expect this will have a material impact on our GBX 1,560 fair value estimate. We believe the shares are currently up with events.