Shares of Opendoor Technologies (NASDAQ:OPEN) are up more than 13.5% in premarket trading Friday after the company reported better than expected Q1 earnings and revenue.
OPEN reported a Q1 EPS of 4c, compared to a loss per share of 48c in the year-ago period and the estimated loss per share of 14c. Revenue came in at $5.15 billion, up from $747.3 million in the year-ago quarter and well above the consensus projection of $4.29 billion.
The company reported 12.67 billion sold homes in the period, compared to 2,462 in the same period last year. Adjusted EBITDA stood at $176 million, compared to a $2.14 million adjusted EBITDA loss in the year-ago period and the estimated $35.3 million. Adjusted net income totaled $99 million, compared to a $20.8 million loss last year and the expected loss of $41.1 million.
Looking ahead to Q2, OPEN expects revenue in the range of $4.1 billion to $4.3 billion, while analysts were looking for $3.93 billion. Adjusted EBITDA is expected in the range of $170 million to $190 million, smashing the expected $30 million.
Credit Suisse analyst Stephen Ju reiterated an Outperform rating and lowered the price target to $24.00 per share from $30.00.
“Opendoor is effectively navigating housing market uncertainty as prior investments position it for continued growth – as pricing mechanisms are adjusted daily, mgm’t is able to maintain its 4-6% contribution margin forecast amid volatile market trends – we note the uptick in spread since last Fall has not inhibited conversion rates,” Ju said in a client note.
Goldman Sachs analyst Michael Ng maintained a Neutral rating and a $9.00 per share price target.
“We're encouraged that OPEN continues to make progress in demonstrating the durability of its margins through (1) effective buying and selling, utilizing data more efficiently than individual homebuyers/sellers; (2) adjacent services including title and mortgage; and (3) positive ROI renovation projects. That said, the weakening housing macroeconomic backdrop (e.g., slowing price appreciation) results in some volatility in margins in late 2022 and into 2023,” Ng noted.
By Senad Karaahmetovic