Compass Diversified Holdings (NYSE:CODI) shares are trading higher during Monday’s premarket session.

The company announced a definitive deal to sell its Sterno food service business for an enterprise value of $292.5 million.

Details

As per the terms, Archer Foodservice Partners will acquire Sterno’s food service business, which generated approximately $30.3 million in subsidiary adjusted EBITDA in 2025.

Compass Diversified plans to use the net proceeds from this transaction to repay outstanding debt. As of December 31, Compass had long-term debt of $1.84 billion.

The company expects to lower its senior secured net leverage ratio below 1.0x after the deal closes in May 2026.

Following the transaction, Compass Diversified will retain Sterno’s home fragrance business, continuing operations under the Rimports name.

This strategic divestiture reflects the company’s commitment to enhancing its balance sheet and focusing on core operations, as stated by Compass CEO Elias Sabo.

Technical Analysis

The stock is currently trading 9.9% above its 20-day simple moving average (SMA) and 15% above its 100-day SMA, demonstrating longer-term strength. Shares have decreased 64.22% over the past 12 months and are currently positioned closer to their 52-week lows than highs.

The RSI is at 54.31, which is considered neutral territory. Meanwhile, MACD shows a value of -0.0836, with the signal line at -0.1337, indicating bullish momentum as the MACD is above the signal line. The combination of neutral RSI and bullish MACD suggests mixed momentum.

  • Key Resistance: $7.50
  • Key Support: $6.50

Earnings & Analyst Outlook

Investors are looking ahead to the next earnings report.

  • EPS Estimate: 35 cents (Up from 27 cents YoY)
  • Revenue Estimate: $22.91 Billion (Up from $19.34 Billion YoY)
  • Valuation: Forward P/E of 386.2x (Indicates premium valuation)

Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $22.19. Recent analyst moves include:

  • B. Riley Securities: Neutral (Lowers Target to $8.00) (March 3)

Benzinga Edge Rankings

Below is the Benzinga Edge scorecard for Compass Diversified, highlighting its strengths and weaknesses compared to the broader market:

  • Momentum: Weak (Score: 21.46) — Stock is underperforming the broader market.

The Verdict: Compass Diversified’s Benzinga Edge signal reveals a weak profile, indicating challenges in maintaining momentum in a competitive market landscape.

CODI Stock Price Activity: Compass Diversified shares were up 3.29% at $6.90 during premarket trading on Monday, according to Benzinga Pro data.

Photo via Shutterstock