What does it mean when an investment analyst says that stock valuations are "compressed"?

This is a way of saying the market or stocks are "cheap." Often this is said in reference to ratios like Price/Earnings or Price/Book Value. If, for instance, a stock normally trades at a P/E multiple of 15, but it is now trading at 12, the number is lower, i.e. "compressed." In the opposite case, people say that valuations/ratios/multiples are "expanded" or "stretched," like in 1999.

Examples of things that can cause ratios to be compressed at the market level are fear of rising interest rates, fear of an economic growth slowdown/recession, and a rise in risk aversion/fear in the market. At the stock level, the same things apply, as well as stock specific issues like an accounting investigation, fear of a sales slowdown, fear of a large stakeholder selling their shares, and so forth can lead to a compressed multiple.

Hope this helps!

not sure on this one I would have to see the full sentance but I am assuming they either mean that the stocks movement is less voliate,

or that the company is experiencing some harsh times and compressing income from unlike places.