Forensic Analysis · Durable Goods, Textiles & Apparel · as of Sep 25, 2026
Compass Diversified Holdings (CODI)
A forensic read on Compass Diversified Holdings built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
F · Poor — capital at risk
Forensic grade
Distress
Financial health
0.1
Distress distance
Clean
Earnings quality
5
Forensic signals
-5.3
P / E (ttm)
-51.2%
ROE
$854M
Market cap
4.91%
Dividend yield
4.8%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence, going concern, valuation). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Compass Diversified Holdings earns an F (Poor — capital at risk) forensic quality grade, and its balance-sheet distress test reads 0.1, placing it in the Distress zone. 5 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
0.3%
FY2025
Return on invested capital.Return on invested capital is 0.3% in the latest fiscal year and rising across FY2023–FY2025 from -2.3%. After-tax operating profit was ($55M) in FY2023 and $9M in FY2025, with operating income at -4.1% of revenue in FY2023, -0.8% in FY2024 and 0.6% in FY2025. The capital base behind it grew +11% across FY2023–FY2025, from $2.4B to $2.7B, and the return did not fall doing it, so the dollars added over that window earned at least the -2.3% the older base was already earning. FY2023's operating profit carried a $91M asset write-down and a $89M goodwill write-off that alone took about 6.0 points off that year's return, so more than the whole 2.6-point rise across FY2023–FY2025 is that charge leaving the base year rather than the capital earning more.
+2.1%/yr
FY2023–FY2025
Share-count dilution.Diluted share count changed +4% over the last 2 years to FY2025 (+2.1%/yr). The count is growing: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~2.1% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2023 has been diluted ~4%.
stopped
FY2024→FY2025
Shareholder returns — halted.Capital returns have STOPPED — $10M of buybacks + dividends in FY2024, but ~$0 in FY2025. A halt usually means the company is conserving cash.
0.9% of rev
FY2025
Stock-based comp load.Stock-based compensation ran 0.9% of revenue in FY2025 — about $0.21 per diluted share. No cash left the business to pay it, which is why operating cash flow adds it back. Net of repurchases the diluted count still rose about 2.2% a year, and the rate is falling. Stock compensation is one source of that issuance; acquisition consideration, equity raises, convertibles and other employee plans also net into the count, and these figures do not separate them.
Key fundamentals
Latest Revenue$1.87B
Revenue Growth YoY+4.8%
Revenue CAGR (2yr)+5.3%
Net Margin-12.1%
Free Cash Flow-$51.1M
Return on Equity-51.2%
Debt / Equity4.25x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Compass Diversified Holdings's actual 10-K/10-Q/8-K filings?
Goodwill impairments.Took $98M of goodwill writedowns across 2 years (FY2023 ($89M), FY2024 ($8M)). Writedowns mean past acquisitions underperformed what was paid for them.