The Opendoor Technologies Inc. (NASDAQ:OPEN) Full-Year Results Are Out And Analysts Have Published New Forecasts

One of the biggest stories of last week was how Opendoor Technologies Inc. (NASDAQ:OPEN) shares plunged 22% in the week since its latest yearly results, closing yesterday at US$21.99. Revenues of US$3.6b crushed expectations, although expenses also blew out, with the company reporting a statutory loss per share of US$2.62, 184% bigger than analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Opendoor Technologies

Taking into account the latest results, the consensus forecast from Opendoor Technologies' five analysts is for revenues of US$3.98b in 2021, which would reflect a decent 11% improvement in sales compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 84% to US$0.88. Before this earnings announcement, the analysts had been modelling revenues of US$3.67b and losses of US$0.55 per share in 2021. So it's pretty clear the analysts have mixed opinions on Opendoor Technologies even after this update; although they upped their revenue numbers, it came at the cost of a very substantial increase in per-share losses.

The consensus price target stayed unchanged at US$35.50, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Opendoor Technologies analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$30.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Opendoor Technologies' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Opendoor Technologies' revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 43% over the past three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% 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 increased their loss per share estimates for next year. They also upgraded their revenue estimates for next year, even though sales are expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 forecasts for Opendoor Technologies going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Opendoor Technologies you should be aware of.

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