Shares of Opendoor (OPEN) experienced a decline in after-hours trading following the release of its third-quarter earnings report for Fiscal Year 2025. The company reported an earnings per share (EPS) of -$0.12, which fell short of analysts’ expectations of -$0.08 per share. Despite this miss, sales showed a significant decrease from $1.38 billion to $915 million, surpassing the projected figure of $849.6 million.
During the quarter, Opendoor sold a total of 2,568 homes, a notable drop from 3,620 homes sold in the same period last year. Additionally, the gross profit for the quarter was recorded at $66 million, down from $105 million in Q3 2024, while the gross margin slightly contracted to 7.2% from 7.6% year-over-year.
The company’s inventory, consisting of 3,139 homes, was valued at $1.053 billion, reflecting a substantial 51% decrease compared to the previous year. In Q3 2025, Opendoor purchased 1,169 homes, a significant reduction from 3,500 homes acquired in the same quarter the prior year. As a result, the company ended the quarter with 526 homes under contract for purchase.
Looking ahead, Opendoor management has set guidance for Q4 2025, anticipating revenue of approximately $595 million, which is above estimates of $545.1 million. However, the forecast for adjusted EBITDA loss is expected to fall in the high $40 million to mid $50 million range, which is worse than the anticipated loss of $41.2 million, likely contributing to the post-earnings decline in share price.
On Wall Street, analysts maintain a Moderate Sell consensus on OPEN stock, reflecting the cautious outlook. Based on recent ratings, which include one Buy, one Hold, and three Sells, the average price target for OPEN shares is set at $2.18, indicating a potential downside of 67.6%. It’s important to note that these estimates may adjust following the earnings report, as analysts reevaluate the company’s performance and outlook.
Despite the challenges reflected in the earnings report, Opendoor continues to adapt within the evolving real estate landscape. The company’s efforts to streamline operations and manage inventory could potentially lead to recovery in future quarters, making it an interesting watch for investors looking for value in the real estate sector.