What Happened:
Shares of technology real estate company Offerpad (NYSE:OPAD) fell 10.9% in the pre-market session after the company reported first-quarter results with operating margin and EPS falling below Wall Street's expectations. In addition, its revenue guidance for the next quarter fell significantly short of Wall Street's estimates, with management citing a volatile macro.
On the other hand, Offerpad exceeded analysts' revenue expectations this quarter as it sold more homes than anticipated (847 vs estimates of 800). The company observed improved request volume and acquisition pace following the market slowdown in Q4'2023 amid rising mortgage rates. However, it expects the rising rates to impact home acquisitions in the current quarter. As a result, it expects acquisitions to be flat to slightly up compared to Q1. Overall, the results could have been better.
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What is the market telling us:
Offerpad's shares are very volatile and over the last year have had 68 moves greater than 5%. But moves this big are very rare even for Offerpad and that is indicating to us that this news had a significant impact on the market's perception of the business.
Offerpad is down 31.9% since the beginning of the year, and at $6.73 per share it is trading 54.5% below its 52-week high of $14.78 from July 2023. Investors who bought $1,000 worth of Offerpad's shares at the IPO in December 2020 would now be looking at an investment worth $43.94.
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