CMP

We rate COMPASS MINERALS INTERNATIONAL INC (CMP) as a Hold with a composite score of 55.0/100 at a current price of $24.40. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in quality (66th percentile) and value (62th percentile), which together account for the majority of the composite score. All factors score above the 40th percentile, indicating no material weakness in the quantitative profile. We assign a No Moat rating (19/100), High uncertainty, and Poor capital allocation.

Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

COMPASS MINERALS INTERNATIONAL INC holds a top-quartile position (#0 of 50) within the Mining sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 55.0/100 places it at rank #1272 in our full 7,333-stock universe. At $800M in market capitalization, COMPASS MINERALS INTERNATIONAL INC is a small-cap player in the Mining space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 95%, though momentum at the 57th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 15% (-27.7pp vs sector) narrow to operating margins of 4% (-8.2pp vs sector) and net margins of -4.3%, yielding a gross-to-net conversion rate of -28%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $24.40, COMPASS MINERALS INTERNATIONAL INC is trading near fair value based on current fundamentals. Our value factor score of 62/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 55.1x (a 301% premium to the sector median of 13.7x), EV/EBITDA of 19.5x (at a premium), P/B of 3.7x, P/S of 0.7x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a High uncertainty rating to COMPASS MINERALS INTERNATIONAL INC. Key risk factors include significant leverage (486% debt-to-equity), current negative profitability (net margin -4.3%), elevated valuation multiple (P/E 55.1x) that leaves limited margin for error. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: significant leverage (486% debt-to-equity); current negative profitability (net margin -4.3%); elevated valuation multiple (P/E 55.1x) that leaves limited margin for error; the combination of leverage (486% D/E) and thin margins (-4.3% net) amplifies downside risk. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 55th percentile and quality factor at the 66th percentile provide a quantitative summary of the overall risk landscape.

We identify limited risk mitigants at this time, which contributes to our high uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.

We rate COMPASS MINERALS INTERNATIONAL INC's capital allocation as Poor. Key concerns include low returns on equity (-20.7%), elevated leverage (486% D/E), negative profitability, weak asset returns (ROA -3.5%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — COMPASS MINERALS INTERNATIONAL INC significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, COMPASS MINERALS INTERNATIONAL INC receives a Hold rating with a composite score of 55.0/100 (rank #1272 of 7,333). Our quantitative framework assigns a No Moat (19/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 56/100.

Our analysis supports a neutral stance on COMPASS MINERALS INTERNATIONAL INC. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.