By Sam Boughedda
Despite posting a narrower-than-expected loss and revenue beat, Opendoor (NASDAQ:OPEN) shares are down premarket.
The online real estate platform's shares have fallen over 7% on the back of its latest earnings release.
The company reported a loss of $0.63 per share, $0.23 better than the analyst estimate of a $0.86 loss per share. In addition, revenue for the quarter topped the analyst consensus estimate, coming in at $2.86 billion versus the expected $2.47B.
Opendoor reported 39,183 homes sold in 2022, representing an 80% increase compared to 2021. However, in the fourth quarter, there were 7,512 total homes sold, down 23% compared to the same period last year.
Looking ahead, the company sees first-quarter 2023 revenue from $2.45B to $2.65B, versus the consensus of $2.539B.
In a research note reacting to the earnings report, KeyBanc Capital markets analysts reiterated a Sector Weight rating on the stock, stating Opendoor is "appropriately focused on cost controls and achieving profitability at a $10B+ revenue run rate."
However, they believe the challenge for the company is that its combination of higher spreads and a softer market limits the pace of buying activity; "thus, it will take more macro normalization to return to growth."
JMP Securities analyst stated Opendoor delivered "solid" results. They maintained a Market Perform rating but cut the firm's price target on the stock to $3 from $4 per share, telling investors in their research note that "revenue finished ~14% above the Street, and adj. EBITDA came in just above consensus estimates."
"OPEN's 1Q23 guidance for revenue was above consensus expectations; however, adj. EBITDA guidance was weaker than expected," the analysts wrote. "Despite unfavorable industry dynamics, we believe contribution profit is well positioned for sequential improvements through 2023, as evidenced by its 'new book' of inventory, which is at or better than its target contribution profit margin targets."