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Offerpad Solutions (OPAD)
NYSE:OPAD
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Offerpad Solutions
(NYSE:OPAD)
48Neutral
Positive Factors
Asset-Light Services Expansion
OPAD is making significant progress in expanding its asset-light services, which could eventually enhance margins.
Cost Structure Improvements
Management's efforts to improve the company's cost structure are encouraging despite ongoing industry challenges.
Negative Factors
Industry Challenges
The residential real estate industry continues to be impacted by the lock-in effect as interest rates remain elevated, resulting in depressed transaction volumes.
Quarterly Guidance
Guidance for 1Q25 was softer than expected, particularly for revenue, homes sold, and home acquisitions, sending shares ~8% lower in aftermarket trading.
Offerpad Solutions (OPAD) vs. S&P 500 (SPY)
Market Cap
$40.52M
Dividend YieldN/A
Average Volume (3M)36.99K
Price to Earnings (P/E)―
Beta (1Y)1.75
Revenue Growth-30.10%
EPS Growth51.03%
CountryUS
Employees200
SectorReal Estate
Sector Strength79
IndustryReal Estate - Services
Share Statistics
EPS (TTM)-2.27
Shares Outstanding27,380,438
10 Day Avg. Volume39,066
30 Day Avg. Volume36,994
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.05
Price to Cash Flow (P/CF)0.40
P/FCF Ratio0.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.81Price Target Upside93.79% Upside
Rating ConsensusHold
Number of Analyst Covering4
Offerpad Solutions Business Overview & Revenue Model
Company DescriptionOfferpad Solutions (OPAD) is a real estate technology company operating in the United States, specializing in buying and selling residential properties. The company leverages technology to streamline the home buying and selling process, offering homeowners a convenient and efficient way to sell their homes directly to Offerpad. Their services include direct cash offers for homes, flexible closing options, and home improvement services to enhance property value.
How the Company Makes MoneyOfferpad Solutions generates revenue primarily through the buying and selling of residential properties. The company purchases homes directly from sellers, often below market value, and then makes necessary improvements before reselling them at a profit. Offerpad also offers ancillary services such as home improvement and renovation, which can increase the resale value of the properties. Additionally, the company may earn revenue through service fees charged to sellers who opt for more flexible selling options or additional services. Strategic partnerships with real estate professionals and financial institutions can also play a role in expanding Offerpad's market reach and increasing transaction volume.
Offerpad Solutions Financial Statement Overview
Summary
Offerpad Solutions is facing financial difficulties, with declining revenues, consistent net losses, and fluctuating cash flows. While there is progress in reducing debt, the company needs to address profitability and stabilize its cash flows to improve financial health.Income Statement
Offerpad Solutions shows a challenging financial trajectory, with declining revenues from 2022 to 2024 and negative net income across the years. The gross profit margin is relatively stable, but the net profit margin is negative, indicating profitability issues. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies.45
Neutral
Balance Sheet
The company's balance sheet reveals a significant decrease in stockholders' equity over recent years, which can be concerning. However, the total debt has been reduced to zero by 2024, improving the debt-to-equity ratio significantly. The equity ratio is low but shows improvement as liabilities decrease.50
Neutral
Cash Flow
Offerpad Solutions has shown mixed cash flow results, with positive free cash flow in 2024 compared to previous years. The operating cash flow to net income ratio is positive, indicating better cash generation relative to net losses. However, the free cash flow fluctuates year over year, showing instability in cash management.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 918.82M | 1.31B | 3.95B | 2.07B | 1.06B |
| Gross Profit | ||||
| 72.19M | 70.18M | 182.42M | 207.81M | 87.78M |
| EBIT | ||||
| -46.04M | -104.41M | -127.32M | 19.77M | -13.76M |
| EBITDA | ||||
| -42.83M | -97.47M | -101.24M | 23.00M | -12.49M |
| Net Income Common Stockholders | ||||
| -62.16M | -117.22M | -148.61M | 6.46M | -23.12M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 43.02M | 75.97M | 97.24M | 169.82M | 43.94M |
| Total Assets | ||||
| 313.05M | 379.69M | 825.07M | 1.35B | 235.87M |
| Total Debt | ||||
| 238.20M | 259.50M | 666.07M | 1.03B | 181.68M |
| Net Debt | ||||
| -43.02M | 183.53M | 568.82M | 856.38M | 137.74M |
| Total Liabilities | ||||
| 265.40M | 277.92M | 703.19M | 1.10B | 379.13M |
| Stockholders Equity | ||||
| 47.65M | 101.78M | 121.88M | 257.57M | -143.26M |
| Cash Flow | Free Cash Flow | |||
| 15.43M | 261.50M | 304.33M | -935.61M | 152.01M |
| Operating Cash Flow | ||||
| 20.83M | 261.63M | 305.40M | -921.92M | 154.86M |
| Investing Cash Flow | ||||
| -5.33M | 1.99M | -1.07M | -11.65M | -2.86M |
| Financing Cash Flow | ||||
| -21.82M | -323.98M | -358.47M | 1.08B | -131.15M |
Offerpad Solutions Technical Analysis
Negative
1.45
Price Trends
1.83
Negative
2.54
Negative
3.15
Negative
Market Momentum
-0.12
Negative
37.14
Neutral
36.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OPAD, the sentiment is Negative. The current price of 1.45 is below the 20-day moving average (MA) of 1.61, below the 50-day MA of 1.83, and below the 200-day MA of 3.15, indicating a bearish trend. The MACD of -0.12 indicates Negative momentum. The RSI at 37.14 is Neutral, neither overbought nor oversold. The STOCH value of 36.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OPAD.
Offerpad Solutions Risk Analysis
Offerpad Solutions disclosed 66 risk factors in its most recent earnings report. Offerpad Solutions reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Offerpad Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $1.30B | ― | -7.50% | 2.26% | 6.69% | -137.52% | |
59 Neutral | $2.69B | 11.49 | 0.09% | 8679.75% | 5.56% | -16.50% | |
48 Neutral | $40.52M | ― | -83.20% | ― | -30.10% | 51.03% | |
44 Neutral | $1.05B | ― | 199.35% | ― | -4.16% | -17.19% | |
42 Neutral | $690.16M | ― | -46.67% | ― | -25.81% | -34.43% | |
42 Neutral | $85.25M | 1.44 | -23.58% | ― | -4.92% | 55.82% |
* Real Estate Sector Average
Performance Comparison
OPAD
Offerpad Solutions
1.45
-5.97
-80.46%
EXPI
eXp World Holdings
8.58
-1.78
-17.18%
RDFN
Redfin
8.23
2.86
53.26%
OPEN
Opendoor Technologies
0.93
-1.30
-58.30%
STHO
Star Holdings
6.40
-5.64
-46.84%
Offerpad Solutions Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -34.09% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted several strategic improvements and cost efficiencies, such as exceeding revenue guidance, successful agent partnership programs, and significant growth in the B2B renovate business. However, these positives were tempered by declines in overall revenue and home sales, net losses, and a reduced pace of home acquisitions. The sentiment is balanced with strong operational improvements but ongoing financial challenges.Highlights
Exceeded Revenue Guidance
Offerpad Solutions Inc. exceeded the midpoint of its revenue guidance for Q4 2024, driven by a mix of offerings including cash offer programs and asset-light services.
Agent Partnership Program Success
The agent partnership program drove agent engagement and increased transaction volume, helping to improve customer acquisition cost (CAC) by over 45% year over year.
B2B Renovate Business Growth
The B2B renovate business generated $18 million in revenue for the full year, up 49% year over year, with average revenue per renovation increasing from $11,000 to over $22,000.
Cost Management and Efficiency Improvements
Operating expenses excluding property-related costs improved by $1.1 million sequentially and $2.9 million year-over-year. The company removed $44 million in costs in 2024.
Gross Margin Improvement
Gross margin for the full year was 7.9%, a 47% improvement from the prior year.
Lowlights
Decline in Revenue and Homes Sold
Fourth quarter revenue totaled $174 million, with a year-over-year revenue decline of 28% and homes sold decreasing by 29%.
Net Loss
Net loss for the fourth quarter was $17.3 million, a decrease of 12% year over year. For the full year, net loss totaled $62 million.
Reduction in Home Acquisitions
The company acquired 384 homes in Q4, a 9% decline compared to Q3.
Potential Capital Raise
The company is exploring options to raise additional capital to enhance financial flexibility and support growth.
Company Guidance
During Offerpad Solutions Inc.'s fourth quarter 2024 earnings call, guidance was provided on several key metrics and strategic initiatives. The company reported Q4 revenue of $174 million, within the upper guidance range, with 503 homes sold, a 28% decrease in revenue and a 29% decrease in homes sold year over year due to strategic acquisition pacing. Offerpad's adjusted EBITDA loss for Q4 was $11.5 million, improving by $5.3 million sequentially. The full-year revenue was $919 million, a 30% decline from 2023, with a net loss of $62 million, marking a 47% improvement from the previous year. The company highlighted growth in asset-light services, such as the agent partnership program, which improved Customer Acquisition Cost (CAC) by over 45% year over year and accounted for 45% of acquisitions. The B2B renovate business generated $18 million in revenue, up 49% year over year, with average renovation revenue increasing from $11,000 to over $22,000. Offerpad plans to expand its buy box criteria and target 1,000 acquisitions per quarter, focusing on higher-margin homes, and is exploring capital raising options to support this growth. Looking ahead to Q1 2025, they expect revenue between $150 million and $170 million with 450 to 500 homes sold and anticipate improved adjusted EBITDA. As of Q4 2024, unrestricted cash was $43 million, with total liquidity surpassing $85 million, and the company aims to maintain financial stability while scaling operations.Offerpad Solutions Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Offerpad Solutions Approves New Employment Agreement
Positive
Feb 28, 2025
On February 24, 2025, Offerpad Solutions’ Board of Directors approved a new employment agreement with James Grout, Senior Vice President of Finance, effective March 1, 2025. The agreement outlines terms including a base salary of $325,000, eligibility for performance bonuses, and equity-based compensation. It also details severance benefits in case of termination without cause or non-renewal, including salary continuation, healthcare coverage, and accelerated vesting of equity awards. This move is likely to impact Offerpad’s operational stability and stakeholder confidence by securing key leadership under favorable terms.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.