Opendoor Technologies Inc. (NASDAQ:OPEN) Just Reported, And Analysts Assigned A US$1.59 Price Target

Opendoor Technologies Inc. (NASDAQ:OPEN) shareholders are probably feeling a little disappointed, since its shares fell 3.6% to US$1.34 in the week after its latest yearly results. It looks like a positive result overall, with revenues of US$5.2b beating forecasts by 2.1%. Statutory losses of US$0.56 per share were roughly in line with what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Opendoor Technologies

Following the latest results, Opendoor Technologies' ten analysts are now forecasting revenues of US$5.27b in 2025. This would be a modest 2.2% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 24% to US$0.41. Before this latest report, the consensus had been expecting revenues of US$6.05b and US$0.48 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

The consensus price target fell 9.8% to US$1.59, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Opendoor Technologies at US$2.50 per share, while the most bearish prices it at US$1.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Opendoor Technologies' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.2% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Opendoor Technologies.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Opendoor Technologies analysts - going out to 2027, and you can see them free on our platform here.

Even so, be aware that Opendoor Technologies is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.