What Happened?
Shares of technology real estate company Opendoor (NASDAQ: OPEN) jumped 29.4% in the afternoon session after the company reported solid first quarter 2025 results which featured optimistic EBITDA guidance for next quarter that blew past analysts' expectations. In addition, sales, earnings, and EBITDA outperformed by a wide margin. Sales were down 2% from last year but up from the last quarter, as the company sold more homes and kept tighter control of its inventory. Margins got a small lift, and that helped the company beat earnings estimates, even though it still lost money overall. Zooming out, we think this quarter featured some important positives.
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What The Market Is Telling Us
Opendoor’s shares are extremely volatile and have had 71 moves greater than 5% over the last year. But moves this big are rare even for Opendoor and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock dropped 14% on the news that the company reported weak second-quarter 2024 results. Its revenue guidance for next quarter missed, and management noted it was seeing "additional slowing in the housing market." Overall, this was a mediocre quarter for Opendoor.
Opendoor is down 43.6% since the beginning of the year, and at $0.90 per share, it is trading 69.3% below its 52-week high of $2.92 from July 2024. Investors who bought $1,000 worth of Opendoor’s shares at the IPO in June 2020 would now be looking at an investment worth $83.04.
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