Shares of Opendoor (OPEN) sank in after-hours trading after the online real estate company reported earnings for its second quarter of Fiscal Year 2025. Earnings per share came in at -$0.04, which missed analysts’ consensus estimate of -$0.03 per share. However, sales increased by 4% year-over-year, with revenue hitting $1.6 billion. This beat analysts’ expectations of $1.5 billion.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Interestingly, the firm saw 4,299 total homes sold, up from the 4,080 homes sold in the prior year’s quarter, as shown in the image below. In addition, gross profit reached $128 million compared to $129 million in Q2 2024 and $99 million in Q1 2025, while gross margin came in at 8.2%, slightly lower than last year’s 8.5%.
At the same time, inventory stood at 4,538 homes and was valued at $1.5 billion, which was down 32% year-over-year and 35% sequentially. Furthermore, the company purchased 1,757 homes, a 63% drop from Q2 2024 and 51% from Q1 2025, and ended the quarter with 393 homes under contract for purchase, down 78% and 63% versus the same periods.
2025 Guidance
Looking forward, management has provided the following guidance for Q3 2025:
- Revenue of $800 million to $875 million versus estimates of $1.2 billion
- Contribution Profit of $22 million to $29 million
- Adjusted EBITDA of -$28 million to -$21 million compared to estimates of -$4.86 million
As you can see, 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 Hold consensus rating on OPEN stock based on one Buy, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average OPEN price target of $0.83 per share implies 66.6% downside risk. However, it’s worth noting that estimates will likely change following today’s earnings report.
