Shares of Opendoor Technologies (NASDAQ: OPEN) were heading lower today after the home-flipping specialist missed bottom-line estimates in its fourth-quarter earnings report. Its first-quarter guidance also called for a slow start to the year.
As a result, the stock was down 6.9% at 10:40 a.m. ET.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
Image source: Getty Images.
Opendoor is still drowning in red ink
Like much of the real estate sector, Opendoor has struggled with the slowdown in the housing market. It's taken steps to streamline its business, but it's still significantly unprofitable.
In the fourth quarter, revenue increased 25% to $1.08 billion, which beat the consensus at $982.3 million. However, Opendoor has a business model with which revenue can easily be created without contributing to the bottom line.
It did narrow bottom-line losses, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss going from $69 million to $49 million, but that didn't seem to be enough to please investors. On a generally accepted accounting principles (GAAP) basis, its per-share loss expanded from $0.14 to $0.16, which missed estimates at $0.14.
What's next for Opendoor
In her shareholder letter, CEO Carrie Wheeler said, "As we enter 2025, we are observing a particularly slow start to the year, with signs of a worsening macro environment compared to 2024." Opendoor is likely to need help from the overall housing market to turn profitable, as its business model is unproven even in a healthy environment.
For the first quarter, it expects revenue of $1 billion-$1.075 billion, which is below estimates of $1.15 billion. It also expects an adjusted EBITDA loss of $40 million-$50 million, compared to a $50 million loss in the year-ago quarter.
At this point, Opendoor is unlikely to be a winner without some help at the macro level. If interest rates come down, the stock could surge, but until then, investors should expect the company to keep struggling.
Should you invest $1,000 in Opendoor Technologies right now?
Before you buy stock in Opendoor Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Opendoor Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $736,343!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of February 28, 2025
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool recommends Opendoor Technologies. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
