Shares of Opendoor (OPEN) fell in after-hours trading after the online real estate company reported earnings for its third quarter of Fiscal Year 2025. Earnings per share came in at -$0.12, which missed analysts’ consensus estimate of -$0.08 per share. In addition, sales decreased from $1.38 billion to $915 million. However, this beat analysts’ expectations of $849.6 million.
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Interestingly, the firm saw 2,568 total homes sold, down from the 3,620 homes sold in the prior year’s quarter, as shown in the image below. In addition, gross profit reached $66 million compared to $105 million in Q3 2024, while gross margin came in at 7.2%, slightly lower than last year’s 7.6%.
At the same time, inventory stood at 3,139 homes and was valued at $1.053 billion, which was down 51% year-over-year. Furthermore, the company purchased 1,169 homes, a drop from the 3,500 purchased in Q3 2024, and ended the quarter with 526 homes under contract for purchase.
2025 Guidance
Looking forward, management has provided the following guidance for Q4 2025:
- Revenue of roughly $595 million versus estimates of $545.1 million
- Adjusted EBITDA loss in the high $40 million to mid $50 million range, compared to estimates of a $41.2 million loss
As you can see, EBITDA guidance was worse than expected, which is likely what contributed to the stock’s after-hours move.
Is OPEN Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on OPEN stock based on one Buy, one Hold, and three Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average OPEN price target of $2.18 per share implies 67.6% downside risk. However, it’s worth noting that estimates will likely change following today’s earnings report.
