Opendoor Technologies Inc (NASDAQ:OPEN) shares are soaring Wednesday as investors position ahead of its third-quarter earnings report, due after the market closes on Thursday.
- Opendoor Technologies stock is showing exceptional strength. What’s fueling OPEN momentum?
Opendoor Stock Rises Ahead of Earnings
Opendoor shares are popping Wednesday, one day before the company reports third-quarter results. Wall Street projects a loss of 15 cents a share, versus last quarter’s 3-cent loss, and revenue of $1.05 billion, roughly 19% more than the $883 million Opendoor reported last quarter.
Opendoor beat expectations on both measures in the second quarter, Benzinga Pro data shows. Its 3-cent loss was smaller than the 7-cent loss analysts had predicted. Revenue of $883 million beat the $666.54 million estimate by 32.48%, although it fell well short of the $1.57 billion Opendoor reported a year earlier.
CEO Kaz Nejatian previously promised that Opendoor would be profitable on an adjusted net income basis by the end of the year. The second-quarter results, Nejatian said, show that investors can stop taking him at his word. If Opendoor keeps signing contracts at its current pace and the profit on each home holds up, the company’s existing costs should leave it in the black on that measure once the homes it has purchased are resold.
The loss estimate is wider than last quarter’s, so the earnings bar sits lower than the revenue bar. A narrower loss than 15 cents a share, along with revenue above $1.05 billion, would suggest that Opendoor’s home buying and reselling is holding up and would back the CEO’s year-end profit goal. A larger loss or weaker sales would raise doubts about how fast the company can get there. Investors will also listen for an update on that goal.
Last week, UBS analyst Stephen Ju kept a Neutral rating on Opendoor and lowered the firm’s price target to $2.
OPEN Shares Are Flying
OPEN Price Action: Opendoor shares were up 14.94% at approximately $2.00 at the time of publication on Wednesday. The stock is near its 52-week low of $1.73, according to Benzinga Pro.
Opendoor is bouncing, but it’s doing so inside a bigger downtrend, with the stock still well below its longer-term trend line. A close below 52-week lows of $1.73 would undo the latest advance. A close above the 20-day average at $2.01 would be one near-term sign the rebound is starting to stick.
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