Why Is Opendoor (OPEN) Stock Rocketing Higher Today

Anthony Lee /
2024/05/03 11:39 am EDT

What Happened:

Shares of technology real estate company Opendoor (NASDAQ:OPEN) jumped 25.2% in the morning session after the company reported first-quarter results that beat analysts' revenue and adjusted EBITDA expectations, with the latter beating by a convincing amount. The top line benefited from strong acquisition volumes as Opendoor acquired 3,458 homes in Q1 (up 98% versus Q1'2023). The momentum is expected to extend to Q2, given seasonality tailwinds, which should result in home purchases of over 4,500 homes. While its revenue guidance for the next quarter was underwhelming, adjusted EBITDA guidance for the period was well above. Overall, we think this was a really good quarter that should please shareholders.

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What is the market telling us:

Opendoor's shares are very volatile and over the last year have had 83 moves greater than 5%. But moves this big are very rare even for Opendoor and that is indicating to us that this news had a significant impact on the market's perception of the business.

Opendoor is down 42.8% since the beginning of the year, and at $2.45 per share it is trading 53.6% below its 52-week high of $5.27 from July 2023. Investors who bought $1,000 worth of Opendoor's shares at the IPO in June 2020 would now be looking at an investment worth $226.77.

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