What Happened?
Shares of technology real estate company Opendoor (NASDAQ: OPEN) fell 3.7% in the afternoon session after the company reported mixed third-quarter results where revenue beat expectations but earnings fell short of Wall Street estimates.
The technology real estate company's revenue declined 33.6% year-over-year to $915 million, which was higher than analysts had forecast. However, the company posted a GAAP loss of $0.12 per share, missing the consensus estimate for a loss of $0.07 per share. Adjusted EBITDA for the quarter also missed expectations. In contrast to the current quarter's performance, Opendoor issued optimistic guidance for the fourth quarter, projecting adjusted EBITDA of $45 million at the midpoint, significantly above analysts' forecasts. The stock's decline suggests investors weighed the current quarter's earnings miss more heavily than the strong forward-looking guidance.
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What Is The Market Telling Us
Opendoor’s shares are extremely volatile and have had 98 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 5.4% on the news that investors braced for the company's upcoming third-quarter results, with management having previously guided for a significant sequential decline in revenue and a return to negative earnings.
The company's management had projected third-quarter revenue to fall between $800 million and $875 million, a steep drop from the second quarter's $1.6 billion performance. Opendoor also expected an adjusted EBITDA loss between $21 million and $28 million, turning negative again after reaching profitability in the prior quarter. This renewed pressure on margins was attributed to the sale of an unfavorable mix of older, lower-margin inventory. The negative outlook was amplified by broader weakness in the U.S. housing market. Reports indicated the market was cooling off, with home prices starting to sag as inventory climbed to its highest level since 2019. Compounding these issues, home turnover rates sank to a 30-year low, signaling a tough environment for Opendoor's business.
Opendoor is up 303% since the beginning of the year, but at $6.42 per share, it is still trading 39% below its 52-week high of $10.52 from September 2025. Investors who bought $1,000 worth of Opendoor’s shares 5 years ago would now be looking at an investment worth $337.99.
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