Opendoor Shares Decline Following Disappointing Earnings Report
Shares of Opendoor (OPEN) experienced a decline in after-hours trading following the release of its third-quarter earnings report for Fiscal Year 2025. The company reported an earnings per share (EPS) of -$0.12, falling short of analysts’ expectations, which estimated an EPS of -$0.08. Despite this, Opendoor’s revenue of $915 million surpassed the analysts’ forecast of $849.6 million, though it represented a significant decline from $1.38 billion reported in the same quarter the previous year.
Key Financial Metrics
Opendoor’s Q3 performance included several notable figures:
- Home Sales: A total of 2,568 homes sold, down from 3,620 homes sold year-over-year.
- Gross Profit: $66 million, a decrease from $105 million in Q3 2024.
- Gross Margin: 7.2%, slightly lower than the 7.6% margin from the prior year.
- Inventory: 3,139 homes valued at $1.053 billion, reflecting a 51% year-over-year drop.
- Purchases: Acquired 1,169 homes, a significant decrease from 3,500 homes in the same quarter last year.
- Contracts: Ended the quarter with 526 homes under contract for purchase.
Future Outlook for Opendoor
Looking ahead, Opendoor’s management provided guidance for the fourth quarter of 2025. They expect revenue to reach approximately $595 million, exceeding estimates of $545.1 million. However, they anticipate an adjusted EBITDA loss ranging between $40 million and $50 million, which is worse than the estimated loss of $41.2 million. This disappointing EBITDA guidance may have influenced the stock’s decline after the earnings announcement.
Analyst Ratings for OPEN Stock
Wall Street analysts currently have a Moderate Sell consensus rating for Opendoor (OPEN) stock. This rating is based on one Buy, one Hold, and three Sell recommendations over the past three months. The average price target for OPEN shares is $2.18, indicating a potential downside risk of 67.6%. It is important to note that these estimates might change in light of the recent earnings report.
